In Focus Commercial Credit
Is there hidden money in the work you do?
The answer is probably yes, because of a tax-credit scheme that has already earned significant sums for collections-industry businesses
Ian Cruickshank Associate director, Catax
ian.cruickshank @
catax.com
Innovation and business development are rife in the UK, however this usually requires a significant investment from businesses which can be difficult to source, especially for start-ups and SMEs. One of the most commonly known forms
of tax credit is Research & Development (R&D). This is awarded to businesses that invest in innovation, usually in the form of developing new systems, processes, products, materials, devices, or any changes to the way a business works. Despite being available in the UK since
2000, it is still largely under-claimed. The latest statistics released from HMRC, in September 2018, show that, despite the abundance of innovation being carried out by businesses, only around 43,000 R&D claims were made in 2015-2016. This is around 0.8% of the total number
of businesses in the UK. The UK government is also looking to
increase R&D expenditure as a percentage of GDP over the next decade from 1.7% in
2016 to 2.4% in 2027, so there is an awful lot of focus on ensuring companies are continuing to invest in, and be given the appropriate credits for, developing new innovations within their sector.
Lack of awareness One of the most common reasons for not claiming is lack of awareness – many businesses are unaware that they are eligible for R&D tax credits. HMRC was careful to define R&D in
such a way that it could apply to varied work across multiple industries – the idea was to turbo-charge innovation across every sector. Many would assume that there is not a
huge amount of research and development happening within the debt-collection industry, but this is simply not true. The industry uses significant amounts of bespoke technology to ensure their business remains competitive and compliant. We are experts in specialist forms of tax
The company’s qualifying activity, in relation to this endeavour, represents an attempt to ‘achieve an appreciable improvement to an existing product through technological changes’ which is in accordance with HMRC’s guidelines around what is eligible for R&D tax credits
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R&D since 2014. Since inception 10 years ago, we have helped clients claim over £230m in cash benefits. We recently worked with a debt-collection agency based in Glasgow and helped them receive over £240,000 in client tax benefit for projects undertaken since 2016. This particular company had designed and
developed a new CRM system designed to integrate each client with each debtor to facilitate the overall process flow. The development of this system ensured that the correct solution per each customer and debtor is achieved in an efficient, compliant and affordable manner.
www.CCRMagazine.com The company’s qualifying activity, in
relation to this endeavour, represents an attempt to ‘achieve an appreciable improvement to an existing product through technological changes’ which is in accordance with HMRC’s guidelines around what is eligible for R&D tax credits. One of the biggest challenges that we face
on a daily basis is companies believing that the work they carry out does not represent ‘research and development’, so they do not believe they are eligible to make a claim. In fact, R&D can be claimed for any business which is developing new systems, processes, products, materials, devices, or making any changes to the way the business works.
In excess of £54,000 The average claims that we see for this particular form of tax credit is in excess of £54,000, so it is absolutely worth finding out if your business could make a claim.We operate on a contingency basis so if there is no claim, it will cost you nothing. If you are interested in finding out more,
please get in touch at the above e-mail address or on 07583 687890. CCR
October 2019
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