R&D Tax Credits Boost Advance Funding
Share on facebook
Share on twitter
Share on linkedin

Boost Your R&D Tax Credit Rate from 33% to 45% with Advance Funding

With GrantTree’s unique Advance Funding service, you could accelerate key investments in R&D and increase your R&D Tax Credits payout from 33% to more than 45%.

The R&D Tax Credits scheme is an excellent source of funding for growing businesses. It’s especially beneficial for pre-revenue companies, providing them with a cash credit worth up to 33% of their R&D spending.

However, as a form of corporate tax relief, the R&D Tax Credits scheme only pays out after the end of your financial year. This is a significant problem for companies in need of cash flow. 

The solution is Advance Funding, which allows businesses to access up to 80% of their end of year R&D Tax Credits windfall as soon as they’ve finished their first quarter. 

Advance Funding gives loss-making, high-growth companies the flexibility to increase their R&D spending, extend their cash runway, and make critical investments months ahead of schedule. 

Not only that, businesses that reinvest their advance in additional R&D can significantly increase their end of year R&D Tax Credits windfall – potentially by as much as 36%. 

Here’s how Advance Funding increases your R&D Tax Credit.

Advance Funding - The Initial Benefit

Let’s say you’ve budgeted £1,000,000 for R&D this year. And that all of that budget will be going on development work that’s eligible for R&D Tax Credits. 

If you’re getting the benefit as a cash sum, that would yield an R&D Tax Credit worth £333,500. 

Want to know how much R&D Tax Relief you’re eligible for? Find out in just 2 minutes with our R&D Tax Credits calculator.

Through Advance Funding, GrantTree could forward you up to 80% of your credit –  £266,800 in this example – at the end of your first quarter. 

You can then invest your advance into more research and development work. If you do, you’ll unlock a much larger R&D Tax Credit. 

In this example, investing your advance in R&D would yield an R&D Tax Credit worth £422,480. That’s a 27% increase on your initial windfall.

Before Advance Funding

R&D Spending £1,000,000
R&D Tax Credit
£333,500

After Advance Funding

R&D Spending £1,000,000
R&D Tax Credit
£333,500
Total Advance Funding
£266,800
New R&D Spending
£1,266,800
New R&D Tax Credit
£422,480

Maximising Your Advance Funding

The financial benefits of Advance Funding don’t stop there. 

If you do decide to spend your Advance Funding on R&D, GrantTree can provide another advance covering your R&D Tax Credits increase.

In the example above, we can advance up to 80% of the extra £88,980 you’ll receive in R&D Tax Credits, giving you another £71,184 to invest. 

If you decide to also spend your second round of Advance Funding on research and development, your R&D budget for the year will have grown by almost 34%. 

And if you invest all £71,184 of your second advance on qualifying development work, your R&D Tax Credit will increase again. By £23,740.  

GrantTree can provide up to three rounds of Advance Funding during your financial year. That would increase both your R&D Tax Credit and your research and development budget by almost 36%. 

 Here’s how things would look like after three rounds of Advance Funding:

This graph shows how your R&D budget increases after each round of Advance Funding. 

This is a best-case scenario, where the advance is provided the moment your quarter is finished. It usually takes a couple of weeks for your advance to come through.

Ready to Discuss Advance Funding?

GrantTree’s Advance Funding service is a great way to accelerate your growth and increase your R&D Tax Credit return from 33% to over 45%.

If you want to learn more about Advance Funding, or get the ball rolling on your advance, just drop us a line. 

One of our funding specialists will be right with you!