In the last three years, has your limited company:

  • Developed a new product or service?
  • Improved an existing product or service?
  • Improved efficiencies within your own business?

If you’ve already done this work, or you’re planning to it’s a no-brainer that you should be thinking about making a claim for Research and Development tax relief. So why are so many businesses missing out on the opportunity to reduce their tax bill?

1. Because they’ve never heard of it

Our clients will most likely have heard of R&D because we’re involved in their business activities and looking out for opportunities where they may be able to claim.

But there’s still a large portion who aren’t aware of what it is. For anyone hearing about it for the first time: research and Development tax relief is an incentive designed for companies who are doing something new and commercially innovative within their industry to reduce their corporation tax bill if they are doing something new and commercially innovative within their industry.

2. Because they believe R&D is only for big corporations and the big-name accountants

Not true! HMRC’s figures show that out if of the 39,960 claims made from 2016-17, 34,060 of those claims were made by and awarded to small and medium sized businesses. The opportunity for business development is open to all, whether you’re a new start up, or an existing business looking to gain the edge over your competition.

3. It’s only really for businesses in the Tech space

This is the most common misconception we hear when it comes to R&D.

Whilst the numbers of small businesses making a claim is on the rise, there are still thousands of business missing out on the opportunity. This is likely in part due to the misunderstanding that R&D is exclusively for tech giants and big pharmaceutical companies.

In reality, any company developing something new incurring costs on something they’ve developed, (where the knowledge couldn’t be bought or accessed from elsewhere in your industry) could be eligible. This could include, but certainly isn’t limited to:

  • Software development
  • Engineering design
  • New construction techniques
  • Bio-energy
  • Cleantech
  • Agri-food and life
  • Health sciences

4. Because they dread the idea of a rejected claim or enquiry

It’s understandable that a business owner may ignore thoughts of an R&D claim, out of fear of losing time and money and attracting more attention from HMRC if it isn’t successful.

It may also look like staff will have to spend copious amounts of time getting admin together for a claim, instead of working on the business itself!  But that’s not the case – and we’ll explain why in point 5.

And if HMRC don’t accept the claim your tax bill will be the same as it would have been had you not thought about R&D, so you are no worse off. 

5. Because they don’t know that their accountant can handle it

The way to minimise the chances of an enquiry involves getting someone with experience to file your claim.

But, another common misconception is the belief that the this requires an ‘R&D Specialist’. It doesn’t.

Your accountant should be able to look at the areas in your business that you can make improvement, save on tax and take advantage of opportunities. And if they’re not, it sounds like you need a new accountant, not an R&D specialist.

When it comes down it, if you think you may be eligible, you have nothing to lose in contacting us to find out. 

Think about it. You may have created something new in the last few years and wouldn’t have even considered making a claim for research and development.

But, if you have, what have you got to lose?

Pop your details and the details of your innovative project in the box below and find out if you’re eligible for a claim.

If you want to find out more about R&D, if you’re eligible and how we can help, head over to our R&D page here.

Want to find out more?

Call us on (01474) 853856 and we will put you in contact with one of our advisers, or send us an enquiry by clicking below.

Send us an enquiry