Pocket Media is a software development business that specialises in bespoke mobile applications for estate agents, helping to transform their productivity and efficiency.
As cutting-edge experts in mobile technology, they were looking to grow the company and invest more of their profits into this expansion. One way to increase their available capital was to reduce their tax spend, and that’s why we helped the company to apply for the Government’s R&D Tax Credit, to reduce their tax liability and free up more cash for their growth plans.
Before: the original issue faced by the client
The Client needed assistance in claiming the R&D Tax Credit which has two key benefits for qualifying small businesses:
- Businesses can deduct an extra 130% of their qualifying costs
from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction.
- Businesses can also claim a tax credit if the company is loss making,
worth up to 14.5% of the surrenderable loss.
To qualify for the credit, your business must:
- Prove that you’re advancing scientific or technological knowledge
and do this by resolving uncertainty in these fields through your research and development.
- Be a small business
with less than 500 employees currently in your workforce – a different R&D Expenditure Credit (RDEC) for larger enterprises is also available.
- Meet the specific criteria of the credit
and have either: a) an annual turnover of under €100 million, or b) a balance sheet under €86 million.
After: how FLB provided a workable solution
With Pocket Media carrying out a large amount of technical research and development (R&D) work, we felt that the R&D Tax Credit was a great option – allowing the business to free up cash for their development plans by increasing the percentage of their qualifying R&D costs.
On an annual basis, we’ve:
- Produced an R&D tax credit report for Pocket Media
and have then advised the business on the relief that’s available for them in the current tax year.
- Helped surrender their loses as cash back from HMRC
freeing up more of their annual profits and creating a larger pool of cash reserves.
- Allowed the business to grow
by freeing up the cash needed to fund their own development plans and expand the development of their mobile technology apps.
Making an R&D Tax Credit claim
We’ve helped Pocket Media to make great use of the available R&D Tax Credit scheme, and invest more of their profits into developing their mobile technology in the marketplace.
If your business carries out qualifying forms of R&D, you may also be able to make a claim. Whatever sector you trade in, it’s possible that you’re eligible for the credit. If you want to help your business grow by freeing up more of your profits, it’s an ideal solution to consider.
If you carry out R&D and want to explore your eligibility for the R&D Tax Credit, come and talk to our tax experts.