R&D tax credits COVID-19 update

R&D tax credits are a valuable source of funding

R&D tax credits are a valuable source of funding for innovative businesses at any time but now more than ever it’s important to ensure your business is receiving its full entitlement from the scheme. The most important point we want to highlight at this time is that even if you are unsure you’re eligible it’s always worth having a chat with us to see if you might qualify. It could mean a vital cash injection for your Business if you are eligible to make a claim.

With so much going on in such unpredictable times we want to lighten the load and see if we can support you with this. If your business isn’t currently claiming, it costs nothing to check if you may now be eligible. If your business can demonstrate new ways of working during the Coronavirus crisis including changes to processes or procedures, it could qualify for R&D tax relief. Similarly, companies can significantly increase their claims by demonstrating innovation and new products which have been developed to support the fight against Covid-19. This could be by designing and manufacturing medical supplies or equipment for example.

Key Facts

• Most Businesses first point of call for anything financial is their accountant but they will be spinning many plates at this time and oftentimes those who are eligible slip through the net.
• HMRC have confirmed that they are paying tax credits even if you have delayed payments to HMRC due to Covid-19.
• Once the claim has been processed it could just be a matter of weeks before you receive the cash back in your account.
• While many are concerned about salaries during this time, R&D activity will help protect jobs.
• 80% of R&D tax claims are made up of people’s time. Therefore, should changes in processes or resources that cannot be managed in the normal way, consider if they can be reassigned into development roles within the business to get you through these challenging times. The percentage of these associated costs could be eligible for R&D tax relief.

CORONAVIRUS JOB RETENTIONS SCHEME– will cover 80% of a furloughed workers salary up to £2,500 a month.  This is due to be replaced by partial employers contributions from 1st August.

STATUTORY SICK PAY REFUND- The Government will refund employers up to 14 days SSP per employee off sick or self isolating

SMALL BUSINESS GRANT (£10,000) – These will be channelled through local authorities.  It will be for businesses receiving Small business rate relief and rural rate relief.

SMALL BUSINESS GRANT (UP TO £25,000)- This is aimed at retail, leisure and hospitality businesses

CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME (CBILS) is a loan upto £5m interest free for 12 months.  Helping companies directly affected by Covid-19.  This can be accessed through the British Business Bank.  There is also a (CLBILS) aimed at Large Businesses and has been extended so that the loan size will be increased from £50m to £200m.  Any company who is helped by (CLBILS) will be asked to agree not to pay dividends.

BOUNCE BACK LOANS-These loans are aimed at the smaller Businesses and will guarantee them access to loans of anything upto £50k within 24 hours of applying.

VAT DEFERMENT- The Government will defer VAT payments between 20th March and the 30th June.

FUTURE FUND SCHEME– Is aimed at UK innovative companies and those eligible will be issued with convertible loans between £125,000 to £5m, subject to at least equal match funding from private investors.  To qualify the business must raise at least £250k in funding rounds over 5 years.

For any further advice or support please get in touch!