What is the
R&D tax credit
The HMRC Research & Development (R&D) tax credit scheme was introduced in 2001.
It rewards UK businesses for investing time and money into innovative projects.
Through the scheme, UK SMEs can reclaim up to 33% of their R&D costs for two previous financial years.
The number of claims by SMEs is increasing but despite this, many qualifying businesses are currently not making use of the scheme.
This is due to either a lack awareness of the scheme or a misunderstanding of what qualifies for R&D tax relief.
If your business is not yet claiming tax credits, you could be missing out on a substantial rebate.
Get in touch with us now to find out whether you are eligible for R&D tax relief.
What is R&D and
does my business qualify?
HMRC’s definition of what qualifies as Research and Development is broad, and encompasses many types of projects.
According to the guidelines, R&D occurs where “a project seeks to achieve an advance in overall knowledge or capability in a field of science or technology”.
Here are a few questions that can help you figure out whether your business qualifies for the R&D tax credit scheme:
Does your business create or make products that are new or are improvements on products that are currently on the market?
Has your business ever had to scrap a development project because you’ve reached a dead end?
Does your business employ a developer or an engineer, either in-house, remotely, or as a contractor?
If you’ve answered yes to one or more of these questions, your business is likely to qualify for R&D tax credits.
It is important to note that your R&D projects do not need to have been successful. Failure is very much a part of the R&D process.
If your business attempted to resolve technical uncertainties and invested in creation and innovation, you will likely qualify to reclaim a portion of your development costs.
If you are uncertain whether your project is eligible for R&D tax relief, get in touch with us now to find out.
can my business claim for?
Your business can claim for a number of costs relating to your R&D expenditure:
Salaries of staff involved in R&D projects (proportioned for the amount of time spent focused on R&D projects).
Expenditure on subcontracted work or externally provided workers.
Expenditure on consumables (utilities, materials and software) related to your R&D projects.
Get in touch with us now and we can help you determine which business costs you can offset against R&D tax relief.