To those who are not familiar with this term, Research and Development tax credit claim, or shortly known as R&D, is one very good method through which company owners can reduce tax liability. Due to the great advantages it brings, many companies either don’t know about it, or don’t know they can benefit from it, which is why this tax is highly underused. If you plan to claim R & D tax credits for your company, you should first consider these expert tips.
Get well informed
There may be many reasons why R & D tax credits are so under-claimed, but probably the most common one is that people don’t get well informed on everything related to liability and taxes (and this implies not only the ones they have to pay, but also the ones they can get refunds on). When owning a company, regardless of the industry of operation, it is essential to know what taxes you have to pay, which ones you are not obliged to pay and on which ones you can get a refund.
Keep up with the changes
Even when you think you know everything about R & D tax credits, you don’t. The government may find something to change related to terms and regulations regarding these tax credits, which means that you always have to keep an eye on these changes. Staying updated saves you a great deal of time and effort, because this way you know exactly what steps to follow when engaging in the process of claiming your tax credits.
Prepare the documentation
According to experts, documentation is the most important part in the application process for your R & D. It’s considered a key value-add from many perspectives, such as business continuity, IP generation or even sound management practice. It is recommended that this documentation contains details of project planning and tracking, as well as project time recording functions. This way, you increase chances to obtain a higher refund out of this application.
Don’t forget there’s a deadline!
One of the things worth remembering is that there is a deadline you mustn’t miss out if you want to make an R & D claim. Keep in mind that this claim should be filed within no more than twelve months of the end of you company’s accounting period. Also, the R & D costs should have incurred during the same period. If these twelve months passed, there’s no scope or meaning to make a claim anymore, nor even to increase an existing one.
Hire some professionals
It is important to note that there are companies that provide professional services to those who want to apply for R & D tax credits claim and don’t know what steps to follow. These companies will not only guide their steps, but will also offer expert help in order for those companies to obtain the maximum sum of money they are entitled to. The main goal of tax credit experts is to ensure companies are rewarded for their innovation.