Self Cleaning Filter R&D partly funded by Tax breaks!!
We have been working hard on a number of new self cleaning filters and strainers here at Rotorflush.
This is a good time for R&D as the government is being unusually generous with R&D tax credits and also Patent box. Patent box is the scheme that reduces corporation tax to 10% on profits from sales of patented products. As our products are all patented this is saving us money on our tax bill allowing us to spend more on R&D, which presumably is what they intended.
R&D tax credits are also very generous although involve quite alot of record keeping. All expenditure directly on R&D, i.e bought in parts, a proportion of the wage bill and overheads are multiplied by 2.5.
For example if you spend £10,000 on R&D, this might include, £5000.00 on parts used in prototypes, £3000.00 on wages and £2000.00 on overheads. The revenue then treats this as £25000.00 of expenditure and hence reduces the taxable profit by 25000.00 instead of the £10000.00 that was actually spent.
You will need to speak to your accountant, in my experience most accountants are not familiar with R&D tax credits or patent box. They really make a difference to the cost of R&D.
If you are not making a profit, you can still claim and I believe HMRC will actually pay you!!