R&D Tax Credits: How your creativity can save you money…
Lately on the blog, we’ve been looking at ways in which creative companies can save time and money by streamlining financial and project processes. But of course, we’re well aware that project processes hold little interest to the true innovators in your team. Those daring designers and curious creatives simply crave freedom…
So what if we told you that the freedom to innovate, invent and inspire could also bring about a generous tax break? That by allowing your creatives to spread their wings and embark on a journey of discovery, your business could find itself saving money as well as broadening its horizons?
It might sound too good to be true, but R&D tax credit relief is very real. It provides companies with an enhanced corporation tax deduction of up to 230%* for qualifying R&D expenditure - and yes, your work in a creative or digital agency can qualify under the scheme.
While research and development is more commonly associated with the invention of new products, it could equally apply to digital breakthroughs and UX (user experience) advancements.
Use the break to get ahead
With most digital and creative agencies unaware of the tax credit relief available, few feel they can afford to invest in R&D at all. And that gives you an opportunity to get ahead of your competition - pushing the boundaries of creativity outside of your client projects to develop new and exciting solutions that drive your agency forward.
Establishing an R&D budget enables your team to truly showcase its creativity - creating and building with a freedom that client work could never match. It engages and challenges your employees (particularly those free-spirit creatives), and positions your agency as a market-leader in innovation.
Talk to us today to find out more about what type of work qualifies for R&D tax credit relief. We’ll help you identify the areas in which your eligible to claim - then you can go tell your creatives to get their thinking caps on. Innovation starts here.
* Eg £100,000 qualifying expenditure attracts a tax deduction of £225,000. Many companies involved in R&D are making a loss in the early stages and rather than carry the loss attributable to the enhanced R&D spend forward, they are able to claim a repayment from HMRC. This repayment was increased to 14.5% from 1 April 2014, turning the £225,000 loss into a £32,625 refund (32.625% of the qualifying spend).