It pays to be in business – and it pays to innovate!
So, you’re a young man with a dream of propelling the gaming world in to virtual reality. You do it by using some crowd funding and at the age of 21, the founder/CEO of Facebook wants to buy your business, so what do you do?
When the price tag hits £1.2bn, you naturally cash out, albeit at the significant ire of your kick-starter funders… Don’t expect them to buy you a drink to celebrate your success, but then again you’re rich and 21, a few enemies created along the way to success doesn’t bother you much.
Ok, maybe we don’t all have the next tech driven boom idea like Oculus out of California, but the success stories like this need not stop in the United States. Delivering further advantages to businesses in Mr. Osborne’s 5th budget, it’s clear Britain truly is open for business and in a big way. A new business can go a long way to exploit and make best use of the government schemes accessible to them, which in essence aims to ensure continued success. Not a new business? Read on, the tax breaks aren’t just for the wide-eyed, facial hair sporting, tight jean wearing software/gaming developer types…
You start up with a fantastic new product, funds to develop compliments of the Seed investment scheme or a Horizon 2020 or other development/innovation grant; invest in improving those bargain premises you found and put in plant machinery to then be claimed back via your Capital Allowances under the increased £500K investment allowance, whilst benefiting from reduced energy bills for manufacturers. In selecting a location to manufacture, you step into one of the Enterprise Investment zones, getting further Gov. support. You employ people and under the Employment Allowance receive £2000 cash back on jobs and if they are under 21 they are taken out of jobs tax altogether. Your product and its production are innovative and you claim it under R&D tax credits, as a loss maker in the first year, you have claimed a further 31.8% cash value against the extended losses under the scheme… But in planning for the future, you have the patent application well under way so that any future profits on your sky rocketing sales can have their tax liability by now down to 20% rate halved under the Patent Box. You gain c.£3k of expert coaching to optimise your business via Growth Accelerator who will also match fund training for your now burgeoning staff count……. Oh and the government is going to help you export your products to other markets with their Export Finance guarantee and Insurance schemes, whilst you are ably assisted “on the ground” by the UKTI, saving £000’s on your FX transactions by using a FX specialist instead of your bank.
All of this is so you can maximise your top line sales and bottom line profits, only to reduce the tax liability of them… Sounds a bit far-fetched?
Don’t be so pessimistic; all of these schemes are in place and are readily available to not only the new high tech start up, but also the mature/maturing UK SME’s. Help is out there and it could easily help shape your company’s future in conjunction with an improving economic climate, so it really is worth a punt if you have the slightest inkling that you may qualify. After all, 90% of estimated scheme eligible companies have not claimed their tax entitlement. Is this you?
Many SME businesses have limited awareness of, or erroneously do not believe they qualify for many of the government grants, tax rebates and optimal sources of funding available. An R&D tax credit claim alone could deliver an immediate £80K to your bottom line, which for many companies is the equivalent of achieving an incremental £800k of top line sales within 42 days of claim submission. Much of the work you undertake to develop & grow your business can qualify for significant tax credits/relief, irrespective of the industry you are in.
To round up, you are more likely to be eligible than you think for many of the above support schemes. HOW2 ultimately helps you in this grey area and eligibility for a timely cash injection or tax relief could become a very real possibility if anything in this article sounds relevant to your SME. All you have to do is make that first contact with our expert analysts and the rest will become clearer as the qualifying process gathers momentum.
It’s evident what you might be able to gain with funding & or tax relief, so ask yourself, what have really got to lose by trying?
To KnowHow simply contact HOW2: email@example.com / 01992 505011
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