Research & Development
R&D (Research & Development) is a government scheme which rewards businesses (excluding partnerships and sole traders) that invest in innovation.
If your business is developing new products, processes, materials or services then it is very likely you will be able to claim UK R&D tax relief. The scheme was introduced in 2000 to support innovation and encourage businesses to be more pioneering by offering a financial incentive.
While most large organisations take advantage of the scheme, still – 20 years later – many smaller businesses remain in the dark when it comes to R&D. We want to change this and bring the scheme to the wider business community…
How does it work?
The Research & Development tax scheme allows companies to have up to one third of their R&D expenditure reimbursed by the government.
Put simply: say your staff spend 100 hours on R&D, one third of their time can be paid for by the government to encourage innovation.
R&D tax credit claims can be filed retrospectively, for accounting periods ending in the past two years. The best results come from identifying and recording qualifying activities on a real-time basis and we can help with this.
The incentive comes in the form of a tax break for profitable companies, but the great news is that even loss-making companies can make a claim in the form of a tax credit!
Types of Incentives
The scheme also recognises that not every attempted R&D project succeeds and therefore does not discriminate against failed attempts, so the R&D expenditure will still be claimable so long as a genuine attempt has been made to resolve ‘uncertainty’.
- R&D Tax Relief/Credits:
- Relief: SME companies can benefit from a reduction in Corporation Tax equivalent to 25% of R&D expenditure, claimable for up to 2 years after the end of the relevant accounting period
- Credits: SME companies in a loss-making position can surrender those losses to claim a cash Tax Credit of up to 33% of R&D expenditure for up to 2 years after the end of the relevant accounting period
- R&D allowances: Tax relief is available on 100% capital allowance for capital equipment and buildings used for R&D
- Patent Box relief: A reduced corporation tax rate of 10% is placed on profits stemming from patented technologies
We can help!
We understand that often SMEs simply don’t have the time or the resources to organise making these claims themselves.
Our team has a 100% claim success rate and we know how to extract the most value from each claim.