Explained: R&D Tax Credits
The Research and Development Tax Relief Scheme is a Government initiative, created to reward and encourage UK companies to invest in innovation. If a company in spending money to innovate or conduct research related to their sector, they can make an R&D tax credit claim and receive a cash payment or tax reduction. Do you think you might qualify for R&D Tax Credits? Get in touch today.
Why have R&D Tax Credits?
The government wants to encourage and reward business owners for risk-taking and innovation. The R&D does not need to have been successful, or even completed at the time of applying for the credits, but there needs to be clear evidence of it. To qualify the project needs to have been within the last 2 financial years.
Are you eligible for R&D
Tax Credits?
If your company is taking a risk by innovating, improving, or developing a process, product, or service, then it will likely qualify for research & development tax credits.
Speak to 313 Commercial today to find out if your company qualifies. We can provide advice on ways to become eligible or outline alternative options.
R&D QUALIFICATION
Applying for R&D tax relief
If you are interested in learning more about the R&D tax relief scheme, or would like some advice on how best to secure the credits, please get in touch today. Our team is very knowledgeable and can assist you in any way needed.
Qualifying expenditure
- Staff costs – including salaries, employer’s NIC, pension contributions and reimbursed expenses
- Subcontractors and freelancers.
- Materials and consumables – including heat, light and power that are used up or transformed by the R&D process.
- Some specific types of software that would assist in R&D.
- Payments to the subjects of clinical trials.
Example activities that would be included in R&D claims
The work that qualifies for R&D relief must be part of a specific project to make an advance in science or technology. It cannot be an advance within a social science – like economics, or a theoretical field – such as pure maths.To get R&D relief you need to explain how a project:
- looked for an advance in science and technology
- had to overcome uncertainty
- tried to overcome this uncertainty
- could not be easily worked out by a professional in the field
Your project may research or develop a new process, product or service or improve on an existing one.
What qualifies for R&D tax relief
Research and Development (R&D) reliefs support companies that work on innovative projects in science and technology. It can be claimed by a range of companies that seek to research or develop an advance in their field. It can even be claimed on unsuccessful projects.You may be able to claim Corporation Tax relief if your project meets the government’s definition of R&D.
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