Research and Development Tax Credits

R&D Tax Relief is a Government Incentive to encourage companies to invest in R&D activities by claiming relief on qualifying costs. It’s a surprise for people in many industries that much of the work they undertake to grow their business qualifies for significant tax credits.

How Does the scheme work?

The R&D scheme allows companies to obtain tax relief for qualifying expenditure. Qualifying expenditure being the value invested in the development project which is based on the number of allocated people, the amount of time spent and calculated by their salary.  A claim typically includes Staff PAYE, subcontractors and materials consumed in the process of Research and Development.  In addition, companies that have been in a loss situation are allowed a cash payment alternative if they surrender their losses to HMRC.

The SME scheme is available for companies that have:

  • 500 employees or less
  • Turnover not in excess of €100m, or
  • Balance sheet assets not in excess of €86m

Eligible Costs

  • Employing staff directly and actively engaged in carrying out R&D
  • Paying a staff provider for staff provided to the company who are directly and actively engaged in carrying out R&D
  • Materials, both consumable or transformable materials used directly in carrying out R&D
  • Water, fuel and power used directly in carrying out R&D
  • Software used directly in carrying out R&D.

The current tax relief on qualifying R&D costs is 230% meaning for every £1 of qualifying costs will be treated as £2.30 for tax purposes.

Laboratory testing
a person completing paperwork and using calculator

Who Qualifies for R&D Tax Credits?

Do you attempt to solve problems for your clients or overcome issues for them?

Key Questions to ask your client –

  • Do you encourage advancement in the field of science or technology?
  • Do you seek to test or improve innovation new materials, process or code?
  • Is there testing of your solutions after they have designed them?
  • Do you work involve new processes or new ways of thinking?
  • Do you encourage your team to find better, faster, more efficient, or more effective solutions?
  • Are you attempting to achieve or resolution of uncertainty?

Do You Qualify for R&D Tax Credits?

Are you carrying out qualifying R&D activity? Maybe you are attempting to develop a new product, trying to achieve something that has a level of uncertainty or even modifying an existing product or process. If this is you, then you are likely to be undertaking qualifying Research and Development.

How Can We Help?

Capital Allowance Review Service has completed R&D claims for SME’s all over the UK and with a 100% success rate we continue to help companies to make a claim for their developments with no upfront cost. Our average R&D Tax Credit claim is £50,000.

To get the process started, complete our online enquiry form today.

Money being saved
If you would like to discuss further, please call us on 01782 916240 and speak to one of our experts.

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