R&D Tax Credits
Calculate your potential R&D tax credit claim
We estimate you could receive up to
as a tax benefit.
Steps To Claim R&D Tax Relief
We make arduous steps of R&D claim simple for you. Your R and D Tax reward is just 6 steps away:
R&D tax Credit Consultant
Background Check and Assessment
Receive your R&D credit
How do i qualify for R&D Tax Credits?
Does your business qualify for HMRC R&D claim?
Many of you are unaware of the fact that your project falls under HMRC’s criteria of R and D and is eligible for R&D claim.
You can qualify if your business has:
- Invested in improving production efficiency.
- Utilized technology and contributed by creating new services, systems, solutions, tools, or products.
- Faced issues and overcame, or lost the fight due to ‘technical’ matters.
- Have you contributed to the improvement of products by modifying them?
- Have you tried manufacturing various new methods and tools?
- HMRC counts your project eligible for R&D tax relief, if you have contributed to the development of the tools, methods, or appliances in the right way.
You also need to have spent money developing it, and in the right ways so that HMRC will count it for your R&D tax relief.
You can get R&D Tax Credits if:
> You have a UK company;
> That company must have actually contributed in building a technology that meets the above criteria of R&D claim;
> That money was spent on either:
• Staff on PAYE;
• External contractors paid day rate;
• Subcontractors who informed the valuation and provided you with the project;
• Materials that were used up during the project and could not be sold on for full price;
• Software licenses-which were needed to deliver the project.
Which R&D credit scheme is right for your business?
What scheme you use to make an R&D tax credit claim will largely depend on whether you are an SME or a large company.
SME R&D Tax Credit:
SME includes companies with staff under the count of 500 or less, a turnover of no more than €100, or else having gross assets up to €86 million, that includes the start-ups. These companies are eligible to apply for the SME R&D tax credit.
All the companies with staff above the count of 500, a turnover of more than €100 million, and having gross assets of €86 million gross assets fall in this category.
If your company fulfills the prerequisites of an SME R&D tax credit, you will choose the SME scheme to claim the R&D credit. If you fall under the category of a large company, then you will claim R&D tax relief via the Research and Development Expenditure Credit (RDEC).
However, there are some other factors involved like grants and contracts which restrict an SME from having access to the SME R&D tax credit scheme, so in that case, you may need to make an R&D claim either via RDEC or via both schemes.
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We have helped many SMEs across all sectors to receive millions of pounds every month so they can re-invest their money into their businesses.
What evidence does HMRC need?
- HMRC requires answers to few questions for HMRC R&D claim like:
- Exactly what is the technological or scientific advance?
- What ‘uncertainties’ were you exploring?
An explanation of the problem you need to overcome in a simple, non-technical way.
- Why didn’t you consider professional help?
- HMRC requires some information regarding “competent professionals” who were consulted to find knowledge gap and played their role in defining the research as having ‘uncertainty’, rather than just being day-to-day research.
- How did you solve these ‘uncertainties’?
- This is a brief report of your R and D project, its analysis, and an evaluation of your project’s conclusion. Filling the knowledge gap or contributing by cost reduction and productivity are also equally recognised for R&D tax relief as creating something new.
- No need to worry, we are here to guide you for the preparation of questions that will be asked from you for the R&D claim.
How much is claim worth?
Your company’s current position plays a vital role in the calculation of your R&D tax relief.
1: Profitable SME’s
Profitable SME companies will benefit on average by a saving of 25%. If the company spent £100,000 on R&D projects in a year then its corporation tax liability would reduce by up to £25,000.
2: Loss Making SME’s
Loss-making SME companies can also get benefit in the form of R&D credit. Primarily the loss-making company gives HMRC a £1 loss in return for 14.5p. This may sound like a bad deal but if the loss was carried forward against future profits at a 17% tax rate the company eventually in the future would only be getting 17p for its £1 loss, which turns out to be a profitable deal for you.
If the company spent £100,000 on R&D projects in a year then its potential R&D Credit would be £33,350.
3: Large Companies RDEC
Large companies whether they are profitable or loss-making, both can get an equal benefit, both potentially acquiring an R&D Credit of 9.7% of their amount spent on Research and Development.
If your company has contributed around £100,000 per annum on the R&D projects then its R&D credit would be £33,350.
Understanding R&D Tax Credits
Which projects are eligible for R&D tax relief claims?
HMRC has provided detailed eligibility criteria for R&D tax relief claims according to which any project which aims for advancement in science or technology may qualify for an R&D tax relief claim. The eligible activities include:
Creation of new product, service or process
Modification of an existing product or service
Resolving scientific or technological uncertainty
Things I should consider for making an R&D claim?
Is your project seeking advancement in science or technology?
What is the advancement your project is trying to seek?
Are results being sought readily deducible?
Does your project involve overcoming uncertainty with the help of professionals?
Can loss-making companies claim R&D tax relief?
Yes, R&D tax relief is available for both profit and loss-making companies. Loss-making companies can receive R&D incentives as payable cash credits of tax reduction. R&D tax credits are very beneficial to regulate cashflow of loss-making companies.
Who qualifies for the SME scheme?
SME scheme is for small or medium-sized companies that have:
Less than 500 employees
The balance sheet of less than £86 million
Turnover less than £100 million Any company fulfilling the aforementioned criterion is considered SME and is eligible to claim R&D tax credits through the SME scheme unless it has taken government grants that restrict access to the SME scheme.
Who qualifies for the RDEC scheme?
Research and Development Expenditure Credit RDEC scheme is for the larger companies which have:
More than 500 employees
The balance sheet of greater than £86 million
And turnover is higher than £100 million Companies that are not liable to corporation tax will claim R&D tax credits or tax reduction through the RDEC scheme. Those SMEs which undertake subcontracted R&D project can also claim via RDEC scheme.
What costs qualify for R&D tax credits?
You can claim R&D tax credits or R&D tax relief on expenditures directly involved in R&D projects. Qualifying expenditure includes,
Expenditure on testing of prototypes
Is there any minimum level of qualifying expenditure?
No, since 1st April 2012 minimum requirement for qualifying expenditure has been removed by HMRC. Now a company of any size with any amount of qualifying cost can claim R&D tax relief.
How R&D tax credits are beneficial for your business?
R&D tax credits are beneficial funding for innovative businesses, allowing companies to reclaim their qualifying R&D expenditure. This helps companies streamline their cash flows and grow by reinvesting credits in innovation.
Which costs do not qualify for an R&D claim?
Production and distribution of goods
Cost of land
Cost of creation of patents and trademarks