The Price Of Innovative Thought: How Spending Money To Innovate Will Save You Money For Company Growth

In 2000, the UK government introduced r&d tax relief for companies who could demonstrate they were encouraging scientific and technologically innovative thought in their processes, their products and in a variety of other fields. This led to companies being able to make claims on their R&D work to help push growth and save money, therefore reinvesting this profit, in growing the company further. However, the effectiveness of this can be judged on how much money a company can spend, whether it is feasible for them to invest in R&D and whether they will be met with a favourable outcome. This article will look at this notion in closer detail to measure its efficacy.

The Importance of R&D

R&D has been a staple opportunity for companies to create new products or enhance their existing ones to give them the edge over their competitors. The importance of understanding the market need, via market research, will provide the foundations for the product or service you offer to become a niche, and have its own unique selling point.

R&D investments provide the productivity and differentiation in the market, allowing them to outperform rivals and hold leverage over them. The innovative product can also be sold to larger corporations, who have more resources to expand on the work but also giving you a distinctive and progressive reputation in the industry.

R&D also helps to create a connection between various parts of your business strategy, whether it be growth in sales or reduction in operational costs. The media and advertising wing would be a great beneficiary as the new product or service can become an effective marketing campaign to help draw attention to your firm and increase its market value.

In addition to this, another advantage is the government scheme to provide r&d tax relief; an important milestone in the progression and value placed on R&D.

The r&d tax relief Scheme

R&D will have cost implications for all business, so the need to balance this with the monetary growth will have a bearing on whether a firm decides to invest nothing, a little or heavily in this department. This has led to the government providing r&d tax relief, to help companies with their scientific and technological projects. The company must show that they wish to make advancements in these fields. It must be part of their existing trade or one they wish to initiate. To claim, the project must also explain the hurdles present and how the company is overcoming or trying to overcome them. The hurdle should be something that cannot be solved by a professional in the field.

There are a multitude of activities that your company can put a claim in for, including projects for software development; automation and increase in processes. The costs you incur to complete these projects through the r&d tax relief scheme means you can claim on staff expenditure; materials and even lighting and heating costs; a few of many other claimable expenses.

Once these factors are examined then the business can be eligible for r&d tax relief, which will come in the form of cash payments and/or a decrease in Corporation Tax. This can usually be claimed for the last two completed accounting periods.

The Potential Growth

The notion and the benefits of R&D is apparent but the potential growth to your company can be significant. Successful R&D projects your company achieves can lead to unique products and services, which will bring financials gains, diversifying your income streams and appealing to new investors in your industry.

With results from R&D, your company can see itself have a competitive edge in the industry, making your mark amongst others and establishing yourself as a market leader. This could potentially spawn new intellectual property, resulting in financial gains.

R&D also opens the doors for collaboration with other companies, universities or colleges, which allows the transfer of knowledge and expertise and therefore access to facilities, knowledge and expertise. This could be a crucial step in lowering costs and creating new and exciting ideas, which could benefit both organisations. The collaboration with an established firm can lead to your brand becoming stronger and further reputable, giving you the commercial success associated with a highly respected partner, allowing you to envisage bigger and brighter goals.

The Areande Approach

The overall advantages of this venture are apparent and with the correct and professional guidance, r&d tax relief can really help your company succeed and make a positive impact in the industry. Areande has been found to be a market leader in this realm, with a third of partners doubling their income. They can steer your organisation to heights previously not fathomable and with their knowledge and experience, help realise the true potential of your company and its vision.