The discussion our US friends are having about the Section 199 Credit made me think about our own R&D Tax Credit scheme - http://www.hmrc.gov.uk/ct/forms-rates/claims/randd.htm
I wondered if anyone here had managed to benefit from this?
The problem lies here:
Your company or organisation can only claim for R&D Relief if an R&D project seeks to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty - and not simply an advance in its own state of knowledge or capability.
Particularly:
It’s not enough that a product is commercially innovative. You can’t claim in respect of projects to develop innovative business products or services that don’t incorporate any advance in science or technology.
I guess the interesting thing for bootstrappers is whether a technical and commercially innovative product is deemed to resolve scientific or technological uncertainty.
My anecdotal experience, through working with a client taking an innovative hardware product to market here in the UK over the past 2 years, is that this is hard to prove with HMRC. Maybe they were unlucky.
It does seem as if it is something that needs specialist knowledge to claim. Some useful stuff here: http://granttree.co.uk/tax_credits
I asked someone from HMRC (IIRC) about this at a business show a few years ago. It didn’t sound like it was possible for me. It also sounded like a lot of red tape. I’m not a fan of beaurocracy…
But I wonder if there any other tax rules we can take advantage of, that I don’t know about.
I know of companies that do is, and yes, it involves some bureaucracy. You have to spending across projects, and for each project you want to claim for. Companies I know of usually have to convince their auditor that what they are doing is innovative, and there is an element of risk of it failing (as the rules say innovative things will not have a guarantee of success).
I don’t know how small companies would do it. Certainly worth investigating.