Is your business eligible for R&D tax credits?
R&D tax credits can offset much of the expense attached to research and development whilst helping you make your capital go further, but the area can be so complex that it’s normally essential to seek help and advice from outside specialists.
Clarifying the criteria
One of the problems with finding out what qualifies for R&D tax credit is that terms like “technology” can be interpreted differently. Many companies have faced trouble when asking for clarity from HMRC itself, due to the fact that some of the organisation’s staff aren’t as informed on the topic as you might expect. HMRC’s guidelines can also seem ambiguous, and the manner in which they regularly change can also cause headaches.
Technical uncertainties
One way to make a successful claim for R&D tax relief is to make sure that your project solves a technical uncertainty. This means that your solution must be truly innovative and cannot be worked out by a competent professional in the relevant field.
If your project has led to an outcome that has never previously been achieved, you may well qualify for the relief. However, the project could also be eligible if it has only been achieved by a small number of others and the way that they achieved it is not commonly known.
Must the project be a success?
The more you have spent on R&D, the more you are likely to qualify for the tax credits. If you only spent a four-figure sum on the project, you are far less likely to be eligible than if you’ve invested over £100,000 on reaching your outcome, as this normally means technical uncertainty was involved.
The likelihood of gaining the relief is also greater if the project was delivered by competent people with sought-after qualifications. The outcome of your project must not be clear from the outset, and it doesn’t always need to be successful in order to qualify for relief.
What if others have achieved the same outcome?
If you have no knowledge of whether your desired outcome is actually possible or feasible and this knowledge is “not readily available or deducible by a competent professional working in the field”, there is a strong chance you may be able to access tax relief. You won’t be able to simply play around with an idea that already exists and you must choose between creating a brand-new idea or completely reworking an old idea.
Contacting R&D Tax
At R&D Tax Solutions, we support organisations from various industries including aviation, software, manufacturing, subcontracting, land remediation, engineering, and even loss making companies. Talk to us today to find out more about understanding and claiming qualified research and development expenses in Manchester.