George works hard in his business. He gets up early every day and organises his team. There are so many things to do and so little time to do them in. He plans ahead to ensure that he brings in the money needed to keep the business running and draw a small income for himself. The business has been running for a few years and he loves it. He wishes that things were a little easier, especially financially, but the feeling of satisfaction from building his own business is amazing.
Henry works hard too but knows when to take a step back. His business has grown over the last few years and he really enjoys his role in developing new ideas and the team. He doesn’t worry as much financially as George for two main reasons –
1. He isn’t built that way. Worrying about it doesn’t change anything.
2. He took a step a few years ago that has made a significant difference to his business
Henry works just as hard as George. He knows the value of seeking advice in specific aspects of his business. He knows when he should consult someone else – or even throw a whole part of his business to a professional to look after.
So, what did Henry do differently?
Henry sought the advice of Harlands to look after the forecasting, accounts and tax for his business. We can all look at hiring an accountant as a cost that we don’t need. After all, how hard can it be to keep track of what comes in and what goes out? It is all there in black and white on the bank statement.
There is far more to a quality accountant than just picking up the income and expenditure…
We helped Henry look at his business in a more strategic way. One of the first things that became obvious to us when we looked at his business was the fact that he hadn’t claimed for a simple tax relief that could make a massive difference to how he operates.
Henry hadn’t considered R&D tax credits…
As we have claimed back millions of pounds in R&D tax relief for businesses all over the UK for a number of years, we were really interested to find out why he hadn’t claimed it. Here are some of the reasons he gave us –
• He didn’t know a great deal about it and thought it might have taken a lot of research to understand
• He thought it wouldn’t apply to his business as he didn’t class what he did as ‘pure’ Research and Development
• He was too busy to look into it further so assumed it wasn’t going to help
And this is often the case with people we help understand and claim for R&D tax credits. They don’t know enough about it so assume that it isn’t for them. We are all busy with our business, so investigating something that isn’t obvious on first glance doesn’t feel like a great use of our time. R&D tax credits are underclaimed in many parts of the UK.
So, how do R&D tax credits work for Henry?
These are an incentive set up by the government and administered by the HMRC. We looked at Henry’s business and saw a potential claim. After that it took us around half an hour to ask a few questions, get to know what Henry did better and let him know about his claim. Ans that’s how long it would take us to assess your business. From there, we complete two forms and send them to the tax man. One explains the nature of the R&D project you undertook and answers the standard questions posed by the HMRC. The other outlines the financial details of this. We can work with your existing accountant to pull all of this together.
Henry’s successful claim came back to his business in only 6 weeks and was for a total amount of £35,000. This is the size of an average claim for us on behalf of our clients. And he has been claiming every year since. The cash makes a significant difference to his business.
What do we want? Well, we would like to speak to any Georges out there. If you are a George please get in touch and we will help you to understand if you have a R&D claim in your business
By Harlands Accountants LLP