With around 15,000 new tech start-ups being created each year – generally burning cash as they progress through their R&D road map – the importance of R&D Tax Credits to early stage businesses cannot be overstated.
Whilst many early stage companies are focussed on equity rounds to access funding, non-dilution funding should not be ignored as it can avoid the necessity of having to part with too much equity, too early.
Within the world of non-dilution funding, R&D Tax Credits should be given sufficient attention at the earliest possible opportunity, not left to the accountant to sort out. Otherwise a potentially extremely valuable source of cash may not be being optimised.
Your accountant may be a software and R&D Tax Credit specialist – but the chances are they aren’t.
How much are R&D Tax Credits worth?
For SMEs, the rate of enhanced deductions is currently set at an extra 130%; this equals a cash saving of 24.7% of the eligible R&D cost (assuming the tax rate to be 19%).
Not all SMEs (and particularly early stage start-ups) will have taxable profit, so an extra deduction from taxable profits would not be of immediate use to them.
Instead, loss making SMEs can convert their losses (attributable to qualifying R&D spend) to cash, at a rate that currently amounts to approximately 33% of their qualifying spend on R&D.
These reliefs for SMEs are extremely valuable and can provide cash at a critical stage to support the continuing R&D effort.
Example of a £500k loss making SME
In the above example, an overall cash benefit of c£66k could pay for another developer, or help fund the ones you currently have – not to be sniffed at!
However, because of all the other urgent priorities facing tech start-ups, R&D Tax Credits is often delegated to the accountants – potentially exposing the company to missed cash opportunities.
Why MSC R&D?
We have over 30 years’ experience in helping R&D technology companies deliver profitable growth through innovation. Our knowledge and experience of the R&D process is unrivalled, as is our expertise in maximising available R&D tax relief for our clients.
Our commitment to quality is evident in our ISO9001(2015) and EFQM 5* R4E accreditations.
Our fast-track blitz process ensures that our clients minimise the impact on their day to day activities.
Basically, if you use MSC R&D, this is what you get:
- THE HIGHEST VALUE R&D TAX CREDIT CLAIM
- IN THE FASTEST POSSIBLE TIMESCALES
- MINIMISING YOUR TIME AND EFFORT
- ENSURING TOTAL HMRC COMPLIANCE
- PAID ON RESULTS
Why not go to sleep at night, confident that you are successfully exploring all forms of funding for your business.
It just takes a phone call: 0114 230 8401
https://mscrnd.com/what-we-do/software-rnd-tax-credits/
