Is your business entitled to claim R&D tax credits?
Many businesses from various sectors are failing to claim the R&D tax credits that they are entitled to, as they don’t realise they are eligible. Some business owners are not even aware of the existence of the tax relief, while many of those that are remain confused by the rules and regulations surrounding it.
Thankfully, help is available for those that suspect they may be eligible to qualify and wish to find out more about what steps to take to secure the relief. Let’s take a look at what qualifies for R&D tax credit.
Do you pay corporation tax?
If you file a corporation tax return, there’s a chance you could be eligible for the relief. No matter whether you’re a profit or loss-making company, which industry you operate in or what the size of your business is, it’s worth doing your homework to find out whether you are eligible as a corporation tax paying business.
Have much have you invested?
If you have invested financially into you project you may be able to obtain relief even if the project was not a success. R&D tax credit qualified expenses include internal salaries, certain software costs and consumables such as money spent on electricity, materials, heat and light.
Understanding eligibility
The fact that R&D encompasses a wide range of activities means various rules are sketchy and open to interpretation. However, your project must be based on solving ‘scientific or technological uncertainty’ and shouldn’t be easily deducible by a competent professional working in the field. Of course, it can be difficult to ascertain whether your project qualifies or not, but an experienced tax advisor can let you know where you stand.
‘Competent professionals’
You will need to show HMRC that ‘competent professionals’ have worked on your project. That means identifying who these professionals are, so they can provide information on the advancements that have been made and why the project innovative and eligible.
The two regimes
There are two R&D tax credit regimes available, with one being designed for SMEs with fewer than 500 staff. To claim under the SME regime, a business should be turning over less than €100 million or have a balance sheet of under €86 million. Larger companies must claim under the Research & Development Expenditure Credit (RDEC) regime.
Although you don’t need to have achieved a successful outcome, you will need to show that your project was designed to reach an advance. These tax incentives have helped the UK build on its reputation as a highly desirable place to do and grow business, though it’s widely agreed that more work needs to be done to raise R&D tax relief exposure and accessibility.
Getting help with R&D tax relief
At R&D Tax Solutions, we provide advice and assistance with R&D tax credit claims for large and small organisations in a variety of industry sectors. Contact our office in Manchester today to learn more.
