R&D Tax Credits

R&D Tax Credits are a key part of the Government’s strategy to support innovation in the UK and typically, most SMEs qualify. They can help to reduce your corporation tax liability or can be claimed as a cash sum.

R&D Tax Credits Explained 

What are they? Who is eligible? What expenditure is eligible? How much could I claim?

It’s not all about ‘people wearing white coats in labs’ … 

Research and development (R&D) tax credits are a valuable government tax relief that rewards not only large UK companies but SMEs for investing in innovation. It aims to compensate companies that are developing new (or improving existing) products, processes, systems, and materials. 

For many, it’s a little-known opportunity. It can be claimed as a tax credit at the equivalent of up to 33p for every £1 of qualifying expenditure.

You don’t have to be developing new products, processes or services; if you’re enhancing existing ones, then the chances are you’ll be eligible for a cash payment and/or Corporation Tax reduction >R&D Tax Credits claim example

FAQs

Are we eligible to claim R&D Tax Credits?

R&D relief is eligible on any project that qualifies as part of a specific project that makes an advance in science or technology. It can even be claimed on unsuccessful projects >Eligibility checker

What is eligible expenditure?

R&D costs can include: Staff costs, External workers, Sub-contractors, Software & Consumables

How do I qualify? 

If you are a Limited Company that has been trading for more than 12 months and can answer yes to the questions below you should have a strong case:

• Do you have a headcount of less than 500? 
• Do you have a turnover of under €100m or a balance sheet total under €86m? 
• Have you been developing or improving your business products, processes or systems?

Can you work with my accountant?

Yes – we have worked with many Accountants over the years.

Can I claim for R&D even though I’m loss making?

Loss making companies can claim R&D tax credits, cash back from HMRC.

•A loss making SME can secure a benefit between 14.5% and 33% of its R&D expenditure.

•A loss making Large company or subsidised project can secure a benefit of 9.7% of its R&D expenditure.

•Loss making SME companies also have the option of not surrendering the R&D loss but instead carrying the loss forward/backwards against profits.

My accountant said I am not eligible for R&D tax credits.

That may well be the case. However, as R&D Tax Specialists, we can often find genuine eligibility where a non-specialist cannot. 

How can we help?

There are several areas where you may need specific advice depending on the circumstances of R&D activities and expenditure so please do not hesitate to contact us.

Click on the following links to find out more about R&D Tax Credits, or you can click below to view the next page.

• What are the tax reliefs available for SME companies?
• Qualifying projects
• Relevant activities on R&D
• Types of expenditure
• Overcoming uncertainty examples
• Staff costs, subcontractors, consumable costs
• Research and Development Expenditure Credit scheme (RDEC)