R&D
If your company is investing in research and development, you could be eligible for claiming Research & Development Tax Credit. It doesn’t matter what sector you’re in or the size of your business, every investment into research and development is eligible for a tax return.
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IS YOUR BUSINESS ELIGIBLE FOR R&D TAX CREDITS
Many UK businesses are unaware of how much they are truly entitled to, whether tax credits, refunds, exemptions, reliefs or business grant funding. To qualify for R&D tax credits, you must:
Criteria 1
Be a limited company in the UK that is subject to corporation tax.
Criteria 2
Have carried out qualifying R&D activities and worked on an R&D project that aimed to make an advance in science and technology – even if it failed.
Criteria 3
Have spent money on the project/projects.
You must also meet the necessary criteria outlined by the UK government. There are currently two types of R&D schemes in the UK; the SME scheme for small & medium-sized enterprises, and the Research and Development Expenditure Credit (RDEC) regime for large companies. The benefits differ based on the category your business falls under.
R&D CREDITS EXPLAINED
The R&D tax credit scheme was introduced in the UK in 2000 to encourage UK companies, both in profit or loss-making, to invest in R&D projects through the development, evolution or innovation using science and technology. The government realised that encouraging innovation is a way of improving productivity, performance and competitiveness in the UK.
CLAIM UP TO 33% OF YOUR R&D COSTS
R&D CREDITS
WHAT ARE R&D TAX CREDITS?
Research and development (R&D) tax credits are a government incentive rewarding UK companies that invest in the innovation of products, services and/or processes. It’s a valuable source of income that helps businesses accelerate R&D, hire new staff and encourage company growth.
R&D RATES
WHAT ARE THE R&D CREDIT RATES
Current R&D tax credit rates mean SMEs can claim up to 33p for every £1 on qualifying R&D activities while large companies can claim up to 10p on every £1 spent. The average cashback to companies is around £50,000 and most companies don’t even realise that much of what they do is eligible.
R&D CLAIM
HOW TO CLAIM R&D TAX RELIEF
To claim R&D tax relief your business will have to showcase how their work and project:
- Attempted to achieve an advancement in science and technology (whether successful or not)
- The Business overcame uncertainty or tried to do it
- Could not be easily worked out by a professional in the field
- The work/project completed by your business must involve developing or improving a process, product or service in order to be eligible for R&D relief.
Whether you own a small business in the West Midlands or a nationwide company with branches across the UK, CapEx Associates can assist you with applying for and claiming R&D Tax Credits.
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We document the latest updates on R&D, stamp duty land tax, embedded capital allowances and business grants.
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