How 2020 is affecting the startup landscape
Suffice to say, 2020 has been a difficult year for businesses. But it’s also offering unprecedented opportunities for start-ups. Ultimately, the biggest challenges for any start-up includes finding the money to develop products and services. With the government’s new Research and Development Roadmap, you could access the support you need. Today, we’re exploring the 2020 startup landscape.
Welcome to the 2020 startup landscape
It’s refreshing to hear some positive news after the last few months. So, it’s good to hear some experts state that it’s a great time to find and raise money for fledgeling businesses.
Of course, that doesn’t mean that it’s suddenly easy to start a new business. On the plus side, Britain is said to be one of the best places in the world to start a business, with over half a million new start-ups recorded between 2018 and 2019 alone.
If you delve deeper into those figures, you’ll also learn that fewer than half of UK start-ups last more than 5 years. The question is, how do you ensure your business’s future?
Recent government roadmaps and existing start-ups
Innovation and invention are inextricably linked to the UK’s history. Perhaps this is part of the reason behind the UK Research and Development Roadmap, published 1st July 2020.
If you’re a firm “driving innovation in the UK” you could benefit from the £1.25 billion coronavirus package announced by the Chancellor recently.
At this point, it’s worth drawing your attention to the tax credits around R&D. In the UK, companies can claim tax relief on any research and development activity. If you’re an existing start-up, you can also backdate your claim for the last two years for up to 33% of your R&D costs against your corporation tax.
This can cover activities from start to end of a project, as well as into the development phase. The idea behind the scheme is to encourage scientific and technological development. These are the kinds of activities that often leave a company running at a loss, and the government’s scheme attempts to re-address this and reward innovation.
Good news for new start-ups
If you’re at the beginning of your business journey, let’s not forget that the government has recently announced £750 million in grants and loans for start-ups focussing on R&D.
And whether you’re an existing start-up or brand new, you’ll be sure to get R&D tax relief on all qualifying projects. You just need to ensure you’re also within these SME limits to be successful, which should be a given if you’re just starting:
- Employ less than 500 people
- Have a turnover of less than €100 million
- Have gross assets less than €86 million
If this is all new to you, it’s also worth checking out what qualifies as R&D activity on the HMRC webpage. As a starting point though, it covers things like staff costs, software, subcontracted services and prototypes.
Perhaps there’s never been a stranger business year in recent history or a more uncertain startup landscape, but it’s also paved the way for companies focussing on innovation to thrive.
The financial support is there. If you need help to get your grant or claim R&D tax relief on current or past projects, contact us now. As R&D tax specialists, we can create a clear plan and give you business the boost it needs.