In the 2018-19 financial year, UK businesses collectively paid £196 billion in tax to the Treasury. This is 27% of the total tax revenue for the year and underlines the importance of businesses’ contribution to the national economy. The whole country benefits from this £8billion rise in business tax contributions compared to the previous tax year.
UK business tax statistics
- £12.2bn: Fuel Duties – 6% of the total
- £28bn: Business Rates – 14% of total
- £33bn: Other business taxes – 17% of total
- £60bn: Corporation Tax – 31% of total
- £63bn: Employer’s NICs – 32% of total
What is the reaction to these figures?
CBI Chief Economist, Rain Newton-Smith said: “Our analysis shines a timely light on the importance of business to the funding of our schools, hospitals and many other public services. The efforts of successful enterprises, paying a fair share in tax, cannot be taken for granted by politicians at a time of such economic uncertainty.”
“From investing in communities and creating opportunities for people, to contributing more than a quarter of the total UK tax-take, businesses are the heartbeat of towns and villages throughout the country.”
“The single most effective remedy to the current structural challenges facing the British economy is a simple one – increased business investment. Any future changes to direct business taxes will need this as a number one priority, keeping in mind the rapid changes that new technology is bringing to the way we work and shop. That means a studied, evidence-based approach is paramount to ensure the tax system in our modern economy is stable, transparent and simple.”
The upside to business taxes
There’s an upside to business tax? Yes, R&D Tax Relief is the positive side to business tax regulations. There are two different schemes and the decision about which is applicable to your company is defined by its size.
This is a completely positive counter-balance to the tax liability faced by every business. We are passionate about making sure that companies don’t miss out on their entitlement. Recent government estimates show that only 10% of innovative businesses are actually claiming the requisite R&D tax relief.
Your company can be making a profit or a loss, your R&D project doesn’t have to result in a successful conclusion and there’s no minimum or maximum claim amount. You do have to prove that your innovation is “making a scientific or technological advance” in your field. This process is quite complex, but the financial rewards are worth the effort.
- Our average claim amount is £49k. Yes…that’s thousand.
- 230% corporation tax relief on R&D spending for SMEs using the R&D Tax Credit Scheme.
- Large companies use the Research and Development Expenditure Credit (RDEC) Scheme, which is worth 11% of your R&D spend.
If you’ve never heard of R&D tax relief before, it is obviously worth looking at to see if your business’s R&D projects qualify. You can give yourself a more personalised estimate of what your R&D tax relief claim is worth by using our free R&D Tax Credit Calculator.
How do I apply for R&D tax relief?
You can go through the process yourself, or you can hire an expert to take away the hassle factor and guarantee an accurate, fully optimised R&D tax relief claim. We have a 100% success rate for our clients with both large companies and SMEs.
There genuinely is no downside to these tax schemes. The worst that can happen is that your project is not eligible. You don’t have to wait for HMRC to decide on this, we help you correctly identify eligible projects, qualifying costs and submit an application through the correct scheme. What are you waiting for?