I was just wondering if there was anything similar to R&D tax credits for an unincorporated business?
I had never really thought about it before but a new client has design expenditure so I am wondering whether they are missing out (by not being incorporated).
Thanks
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+1 to the actual question.
??? to the second near-question ('wondering') - given the near infinite unknowns.
Thanks both. Will mention both the incorporation and R&D but I don’t think they want to change (30+ yr old business and too much hassle/history).
Are you aware of any structures where the business can outsource the R&D to a company? So retain sole trade and move the design to a company?
The only way I know would be to set up a separate limited company and then subcontract the sole trader to do the R&D. However, this is the reason HMRC introduced the cap on credits, based on the NI and PAYE payments, as a fair amount of companies were gaming the system and claiming huge credits. Because of this the maximum credit you would receive would be £20k, assuming the new company doesn't employ anyone.
Hope that helps
Thanks John. The numbers were too small to put any structure in place for this client. However this post has had loads of views so I am clearly not the only one wondering if sole traders are missing out.