Are you missing out on a tax rebate?

NPA Essential

Are you missing out on a tax rebate?

NPA Business Partner, RD Tax Solutions, identifies an opportunity to make savings on pharmacy research and development costs

Statistics show that less than 1% of UK businesses make a Research & Development (R&D) Tax Relief claim, meaning thousands of pounds are being missed out on by eligible companies every year.

This reflects the common misconception that R&D relief is confined to just manufacturing plants, tech giants and research laboratories. In reality, the ideas and inspirations that move industries forward have their roots in everyday innovation, from the professionals on the ground.

R&D is undertaken, in some form, as part of the day-to-day running of many companies and one sector where we have found R&D to be common is within pharmacies.

Pharmacy owners may have heard of R&D Tax Relief but may be reluctant to make a claim, possibly due to a general lack of knowledge of this complex area of taxation.

R&D Tax Credits

In simple terms, if you are a pharmacist developing new processes, devices, products, materials, or services – or materially improving existing ones – then you could be eligible for R&D Tax Relief, allowing you to make savings that are crucial, given the current financial setting.

R&D Tax Credits are the Government’s way of rewarding innovative companies for developing new or appreciably improving existing products, processes, materials, devices or services.

The Credits help reduce a corporation tax bill or can be claimed as a cash sum from HMRC. Types of qualifying expenditure includes:

  • Staff and agency worker costs
  • Software
  • Travel and subsistence
  • Utility bills
  • Payments to subcontractors
  • Costs involved in creating prototypes.

Case Study

A pharmacy based in Southern England investigated their R&D tax position, regarding the qualifying activity it had undertaken.

This included the integration and development of a robotic prescription dispensary unit. After carrying out a more detailed breakdown of the costs involved, the relevant information was sent to HMRC to be assessed.

The pharmacist was told they would be receiving more than £110,000 in tax relief, after discovering that the costs put into developing the dispensary unit were eligible for R&D Tax Credits.

Act now

If you think you may be eligible, now is the time to act. R&D Tax Relief claims are restricted to the last two open tax years; so if you wait it could mean you run the risk of losing the ability to claim back against an entire year’s R&D expenditure.

However, it is important to remember that as long as R&D activity is being undertaken, pharmacy owners will be eligible to submit a new claim each year – making this an ongoing form of tax relief that can benefit you far into the future.

The NPA offers members a range of business solutions and advice to support, promote and grow pharmacy business.

RD Tax Solutions is an NPA Business Partner and a nationwide report specialist that helps owners of limited companies secure retrospective and current year R&D Tax Relief.

NPA members have access to a dedicated in-house Case Manager free of charge, who will identify if your pharmacy is eligible for a claim and will help to secure and maximise Tax Relief on your behalf.

Find out more at npa. co.uk/servicesandsupport/ businesssupport/business-partners.

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