What are R&D tax credits? 

You could be missing out on thousands of pounds in tax relief if you’ve created a new process, product or service or improved an existing one. Many companies are failing to claim the relief they are entitled to as they are unaware that their work qualifies. We are here to guide you.

In short, any project that seeks an advancement in knowledge or capability in a field of science or technology, seeks to resolve scientific or technological uncertainties or to improve existing processes all potentially qualify for R&D relief. The project does not necessarily need to have been successful for the claim to still qualify for the relief.

How do R&D tax credits work?

Businesses that spend money on developing new products, processes or improving existing ones can claim either a cash payment and/or Corporation Tax reduction. This includes projects which were completed up to two accounting periods ago.

Is my business eligible for R&D tax credits? 

To benefit from R&D tax credits, you must:

  • Be a limited company in the UK that is subject to corporation tax
  • Be a limited company as a member of LLP which undertakes R&D
  • Have carried out a qualifying research and development project
  • Have spent money on these projects

Which projects qualify?

Any business in any industry that works on a project to advance overall knowledge or capability in a field of science or technology, and helps resolve scientific or technological uncertainties may qualify for R&D relief.

Some qualifying examples include: software development, engineering design, new construction techniques, life and health science and new web design coding.

The project doesn’t need to be successful, nor does your business have to be profitable to receive R&D tax relief.

Things to consider:

  • Does my company have a project?
  • What is the scientific or technological advance?
  • What were the scientific or technological uncertainties involved in the project?
  • How and when were the uncertainties actually overcome?
  • Why was the knowledge being sought not readily deducible by a competent professional? 
web designers can claim r&d tax relief

What costs qualify?

Your company can claim for salaries, wages, class 1 NIC and pension fund contributions for staff directly and actively engaged in the R&D project. You can also claim for 65% of subcontractors costs.

Support staff costs, for example administrative or clerical staff, do not qualify, except when they relate to qualifying indirect activities. These can be activities like maintenance, clerical, administrative and security work.

Some other costs which do not qualify:

  • Market research
  • Minor / routine tweaks
  • Subsided / state aid funded costs
  • Dividends paid to shareholders / directors

How can we help?

As R&D specialists, we’ve developed a process that is robust and adaptable, tailored to your needs whatever your size, sector or structure. We ensure claiming R&D tax credits is easy for you, so you can get on with running your business.

We will first meet with you and gather all the information we need to create your claim. Our tax specialist will then work with you or your finance team to identify relevant qualifying costs.

We then start putting together the technical report. We need to prove to HMRC that your technical innovation meets the current legislation by writing a ‘technical report’ explaining the innovations you’ve been working on, a summary of the costs you have incurred and how we have arrived at your total benefit figure. If you simply submit the costs in a spreadsheet or skip over the technical details of the project, you’re unlikely to be successful.

We will submit your report and amend your Corporation Tax return with your R&D tax credit calculation and you’ll be rewarded in four to six weeks!

So what’s next?

If you think you are undertaking work which may qualify for R&D tax relief – then you need to find out. We offer a FREE discovery session where we can quickly identify the likelihood of making a successful claim. We can then work with you to make your claim, so you can keep innovating and growing your business.

Email us at discovery@a4g-llp.co.uk or give us a call on 01474 853 856 to get the ball rolling with your R&D claim. 

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.

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