R&D Tax Relief
Tax incentives are great for businesses, especially if you’re a small business and cash flow is key. Many businesses often overlook potential opportunities to claim back on tax because they don’t think they’ll qualify or the claims process is complex. However, research and development (R&D) tax relief was brought in by the Government to genuinely reward those who have invested in R&D projects.
Claiming for R&D Tax
R&D tax relief rewards innovation to help the UK become more competitive in the fields of Science and Technology. To encourage companies to invest in R&D, HMRC offers generous tax relief on corporation tax bills. Unfortunately, whilst billions of pounds have been claimed since the scheme’s introduction, it’s thought 90% of companies aren’t claiming what they’re entitled to. Even if you’re making a taxable loss, R&D tax credits can be paid in the form of cash, which would be extremely beneficial.
What Businesses Can Claim for R&D Tax?
Whilst a generous scheme, there are a few criteria any business wishing to claim must meet, and it’s also important to understand the types of project which can be claimed against.
- You must have already invested in the project and can’t claim beforehand. Claims must be made within two years of R&D expenditure.
- There are different schemes depending on the size of your business, with limitations set on the number of employees you have and your turnover amount.
- There must’ve been an element of uncertainty in the R&D project you undertook, with no expert in field already having the knowledge or capabilities you’re seeking.
- The project must relate to the trade you practice in or one you intend to move into.
- Sole traders, LLPS and partnerships are NOT eligible. It may be worth speaking to an accountant if this is the case to explore if becoming a limited company would be better for your business.
However big or small your project, don’t underestimate its achievements. To be clear, this can be something as simple as an IT system that’s been implemented, an enhancement on a product or a process that’s been improved.
The fields of Science & Technology aren’t just limited to companies you’d normally associate with R&D projects. At R&D Tax Solutions, for example, we have experience across a whole array of sectors including:
R&D tax claims for businesses doesn’t have to be a complicated process. HMRC’s guidance can be incredibly detailed but here at R&D Tax Credits, we understand every aspect of the legislation. As experts in the formulation and completion of R&D tax relief claims, we’ll guide you through the process step by step and can tell you how much we think you can claim for. Based in Manchester, our tax consultancy specialists will do everything they can to ensure you get the outcome you seek.
To make a claim or to discuss your eligibility for R&D Tax Credits, call our R&D tax line on 0161 298 1010 or firstname.lastname@example.org.