Knowledge

R&D Tax Credits for Recruitment Busineses

ATTENTION RECRUITMENT COMPANIES-R&D (Research and Development) Tax credits are often associated with tech companies and geeks in white coats!

I have often thought the same, but it’s not true!

For those of you who may not be aware of what R&D tax credits are here is a hopefully a simple explanation-

Research and development (R&D) tax credits are a government incentive designed to reward UK companies for investing in innovation. They are a valuable source of cash for businesses to invest in accelerating their R&D, hiring new staff and ultimately growing.

So how does this apply to recruitment businesses?

There are some straight forward rules:

You must be using Science or Technology, or software.

There must be uncertainties to overcome; trailing to overcome these is a good sign.

There must be a technical advance, not necessarily rocket science but rather a distinct and unique improvement on what’s currently available.

There was risk involved in developing the solution. You are footing the bill regardless of the outcome, is a typical scenario.

In a recruitment business, for example, you want much better database management and invested in externally written bespoke software to achieve this. You may have had to trial the solution that you specified and paid for, and then integrated it into your existing processes.

Now let’s see how the rules apply; software is the technology and when creating the application, there are often many uncertainties to overcome. Your new solution provides functions which others in the market don’t incorporate, and that’s a technical advance. You may have paid a subcontractor to do the development and then extensively trialled the application, in house, involving many hours of our IT and office staff.

Does this sound familiar? Then it could be well worth inquiring to see if you’re also eligible to make a claim. It can be a very useful cash injection into your business and you are able to reclaim costs incurred for the last two financial years, plus your current year. The rebate goes straight to the bottom line. No further tax costs are applied.

The best way to check out your eligibility, and how much it’s worth, is to ask an R&D Tax specialist. A reputable one will not charge you for this initial advice. They earn their fee by writing the Technical Justification which accompanies the claim, which can be submitted by RJF, and by helping you to maximise your claim by including all the qualifying costs. Overall, it shouldn’t cost you more than 20%-25% of the successful claim value and most R&D Tax Credit specialists charge on a contingency success basis.

HMRC are very supportive and target to process your claim within 28 days from submission of your claim by RJF.

If you would like to discuss this further then feel free to contact me on Linked In through a direct message or in the comments. We will have an initial call with you free of charge, to assess if there is potential for a claim. It will only take around an hour to do the initial call.