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Proof that R+D tax claims are not just reserved for people in white lab coats

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Proof that R+D tax claims are not just reserved for people in white lab coats

IT companies, recruitment firms, and businesses in the construction sector are among those successfully submitting research and development (R+D) tax claims through LBW Chartered Accountants.

The Wirral-based accountants hopes this means its work highlighting that many organisations (who could benefit from huge tax savings) are eligible to claim is starting to resonate with businesses in the region.

Recent studies show that just 3 per cent of eligible companies make R+D tax claims, and LBW believes this is down to incorrect perceptions including what constitutes R+D.

And Lee Webster, founder and managing director at LBW, is urging people to get in contact to discuss their individual cases.

He said: “Business owners often think that R+D is nothing to do with them and it’s only related to employees in white coats in a lab.

“That couldn’t be further from the truth. We have helped clients who have developed their own CRM and time management software because the off-the-shelf solutions available didn’t meet their requirements.

“In another instance, we helped a client in the construction and engineering industry after they worked through a solution to a challenging hurdle on site. They viewed what they did as ‘just their job’, but we were able to submit a successful R+D claim.

“If you spend money on developing something to overcome a problem, and it wasn’t readily available to buy, we urge people to get in touch to discuss it further.”

The tax benefits are also one of the best in Europe, with HMRC keen to reward companies which invest in new ideas and technology.

Gary Cullen, tax director at LBW, said: “The tax benefits are fantastic with a 130 per cent uplift.

“In practical terms, this means that for a £10,000 claim, as well as the amount going into your profit and loss as normal, HMRC allows for a further £13,000 to be added in to your costs for taxation purposes.

“It’s a significant saving on your corporation tax.

“In an instance where the claim takes you into a loss, it can transfer into an R+D tax credit and have the option of carrying the excess loss forward into the next financial year or claim a cash payment.”

Lee added: “We regularly have conversations with clients who don’t think R+D is for them. Once we explain what’s eligible, they say ‘I get it now and will have a think’.

“We have worked hard over the last few years to change the perception and help our clients save tax through R+D claims.

“We hope this is the start of many of our clients doing just that.”

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