Research & development claims
DID YOU KNOW THAT as well as helping reduce the tax you pay, any losses created by an Research and Development claim can be swapped for a tax credit? These government incentives were designed to reward UK companies for investing in advances in science and technology. The cash generated via R&D tax credits enables businesses to continue to invest in new products and develop new medical treatments which will ultimately help the UK economy.
Research & Development claim eligibility
Any company involved in developing or improving products or services is eligible to make an R&D tax credit claim. This will either reduce the corporation tax they are due to pay or it will generate a cash payment back to their bank from HMRC. If you are a limited company in the UK subject to corporation tax and have spent money on qualifying R&D activities then you would be eligible to make an research and development Claim.
Research and Development explained
If there are uncertainties surrounding your project or you are not sure if you will achieve the outcome you are looking for then you could be resolving technological or scientific uncertainties and so you would be carrying out research and development. If you are not successful in your endeavours you might still qualify for R&D.
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What are considered Qualifying Costs for Research and Development
of Total Staff Costs, including employers’ NIC and employers’ pension contributions as well as any job-related expenses.
of materials and consumables, this could include power, light, and heat that are used within the R& D process.
of subcontractors’ costs, companies which are SMEs are eligible for this. For companies that fall under the RDEC rules the subcontractor must be an individual, a partnership of individuals, or a qualifying body.
of software costs, if the software has been purchased only to be used in an R&D project then the total cost can be included in the R&D claim.
of payments to subjects of clinical trials for all science-related research and development.
What R & D Claim would be right for my company?
You are considered a SME company with:
- Less than 500 employees and you have
- turnover of less than 100 million euros or a balance sheet total of less than 86 million.
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If you have external investors this can affect your SME status so please be aware that anyone claiming on your behalf would have to be told about this. An SME would be able to claim the SME R&D Tax Incentive.
You are considered a Large company if you exceed the thresholds above and you would make a claim under the Research and Development Expenditure Credit RDEC.
To find out more on research and development, please call us on 01909 490502
We have helped SMEs across all sectors receive hundreds of thousands of pounds in R&D tax credits, which they have been able to reinvest in their businesses. If you think you are involved in research and development, then don’t keep it to yourself. See if you can claim by speaking with our specialists.