Companies too are on the hunt for cash.
So it’s curious to learn that of the four million growing businesses out there, only 6,000 have bothered to take advantage of the research and development tax credit scheme. That’s despite the extension of eligibility to cover companies with sales of up to £100 million and no more than 500 employees.
The scheme enables a profit-making SME to receive up to £22,500 of tax back for every £100,000 spent on qualifying research and development. According to David Marshall, tax specialist at Alma Consulting, the high level of paperwork is one of the main reasons for the low number of claimants. Be that as it may, for companies with technology and invention at the heart of what they do, the number benefiting from this scheme appears shockingly low.
Circling the wagons
You need to do whatever you can to protect your business. Even the most ambitious of VCs are looking to make savings as it’s accepted that a cautious approach to growth is for the best in 2009.
‘The discussion around the table with my peers is that, for 2008 to 2009, horizontal growth is the new up,’ says Tyler Moebius, CEO of online advertising agency Adconion Media Group.
This is the company that received $80 million from Index Ventures and Wellington Partners at the beginning of the year. Expectations are high for Adconion and yet, while investment continues to be made into improving online capabilities, cuts have been made. The executives and board understand that the “hyper growth” targeted in earlier budgets no longer bears relation to market reality.
What you don’t want to do is make life any harder than it needs to be. If a second round of cuts needs to be made, then don’t delay.
And if there’s free cash on the table – take it.