Power up your business with Innovation!
Innovation has generally been recognised as essential for value creation, both for individual companies and for the UK economy. The development of new ideas, processes and technologies and their flow across different sectors is a significant driver of economic growth and productivity. Recently, innovation has also been identified as crucial to the transition of the economy away from fossil fuels and carbon-intensive business activities.
There are many factors that affect whether and how businesses innovate, for example the availability of skills and capital and government policy measures such as tax incentives.
However, none are more important that the company’s own culture, capabilities, and internal systems – all of which are aspects of its governance. Unless companies are governed in a way that is conducive to innovation, they are unlikely to be able to take advantage of new opportunities.
Our most innovative clients share some key characteristics:
- they invest in activities with uncertain outcomes for which the likely commercial return is difficult to quantify and the risk of failure is higher than normal
- they have a culture which encourages flexibility, experimentation and a high level of individual decision making
- they require a longer-term time investment horizon than many other kinds of business activity
Research and Development (R & D) is the process of taking an innovative idea and transforming it into a fully-fledged product or procedure. R & D tax credits are a government incentive designed to encourage innovation across multiple industries. If you carry out R & D that aims to make an advance in science or technology, this is an opportunity for you to reduce your corporation tax bill or receive a refund from HMRC based upon the relevant costs your business dedicates to Research & Development. Recently, R &D tax credits have been the subject of additional scrutiny by HMRC, and some rates will be less generous from April 2023, but it could still be a useful tax relief for your company.
If you are looking for long term finance to support innovation then you will need to ensure your management accounts are up to date, you make available current detailed lists of debtors and creditors, and you might need up to date projections before an expert will consider your application.
Please talk to us about R & D tax credits and long-term finance, our independent experts have many years of experience and success in advising business across a wide range of sectors.
