Tax Relief of up to 24% for Green Tech R & D

Are you eligible for tax relief for your research and development into green technologies?  R&D Tax North West, together with their partner, Sustainable Footprints, are keen to ensure that businesses across the UK are aware of this benefit and take advantage of the opportunity to claim back up to 24% of their eligible spend on research and development of green technologies.

The UK Government, in its recent Research and Development (R&D) Roadmap, has pledged its support for innovation and has recognised the contribution that this can make to the UK economy.

Companies working in ‘green tech’ and looking, either to adapt their business to reduce their own environmental impact or to develop solutions to wider environmental issues, could be eligible for tax relief on eligible research and development projects.  This is available at two rates, depending upon the size of the company.  SMEs can access relief worth around 24% of the eligible R&D spend whereas large companies are able to claim Research and Development Expenditure Credits (RDEC), net of corporation tax, which is worth around 10% of the eligible R&D spend.

Nick Biden, Managing Director of R & D Tax North West Ltd states, “Many companies, wrongly, assume that what they do isn’t R&D. The definition is much broader than many realise and extends beyond product development or improvement to encompass areas such as adapting to changes driven by regulatory requirements, competition or internal ethics. This could include sustainable technologies such as renewable electricity generation and energy efficiency; development of alternative materials such as recyclable or plant derived plastics; improvement of reuse potential for existing materials; or making existing products more sustainable.”

An example could be a company which seeks to develop more sustainable products or processes that offer the same, or even better, performance than current products could find that they are presented with technological challenges that need to be overcome. This could be the trigger for a qualifying R&D project.

Finding new applications for existing technology could also qualify for tax relief such as the integration of existing renewable technologies to provide a holistic distributed generation capability that reduces the reliance on importing electricity. The building blocks may already exist but how you put them together to achieve the performance may present a technological challenge.

Process development, for example, any work done to improve the process efficiency to reduce scrap rates, wastage, water or fuel consumption in their production process can also be eligible for R & D tax relief.

The tax relief available is significant, offering a corporation tax saving of between 10% – 25% of qualifying costs for profit making companies. These include staff costs, consumables and certain software used in the R&D project, amongst other items. Loss making companies may opt to take the relief as a payable tax credit which can be helpful for start-ups or where the business isn’t cash rich.

We will be partnering with Sustainable Footprints to deliver a short webinar on R&D tax relief for green tech on Thursday 13 May at 2 p.m. For more information visit www.sustainablefootprints.co.uk/event-calendar or contact info@sustainablefootprints.co.uk to book your free place now.

To find out more about tax relief for ‘green tech’ research and development, contact: enquiries@rdtaxnorthwest.co.uk.

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