You could claim thousands from HMRC, thanks to R&D Tax Credits
R&D Tax Credits - you’ve either heard of them or you haven’t. But despite this generous tax rebate scheme having been around since 2000, far too many small companies in particular still haven’t heard of it.
Let’s take a look at what R&D tax relief is and who can benefit.
What are R&D Tax Credits?
R&D Tax Credits are offered by the government as a way of encouraging companies to innovate. It’s important because not only do companies benefit but the wider economy does too.
It works by offering a valuable tax rebate - up to 33% in fact - on money invested in eligible research and development activities. This could be the design of a new product, process or service for example, or the substantial upgrade of an existing one.
The rebate is given either as a reduction in your Corporation Tax, or (if your company has made a loss) as a cash lump sum.
Essentially, if your company has undertaken any scientific or technical work recently then listen up as this is for you!
What costs can be included in an R&D Tax Credit claim?
Absolutely loads of costs can be included here - everything from staff wages and employer NI and pension contributions to subcontractor costs, materials, overheads and much more.
Full details of eligible projects and costs can be found on the Gov.uk website.
Who can claim R&D Tax Credits, and how much?
All limited companies in the UK - of any size and in any sector - can claim R&D Tax Credits. No claims are too small or too big.
As long as a scientific or technical challenge has been addressed where the outcome was uncertain from the start then a claim could follow. As long as the company is registered for UK Corporation Tax of course.
How do I make a claim for R&D Tax Credits?
The first thing to do is make sure your R&D project is actually eligible. The best way to do this is to contact a specialist R&D tax consultancy, who will discuss your claim with you and help you make a maximised claim. This is important because the claiming process is notoriously complex, and it’s very easy to over- or under-claim by accident.
Look for an R&D tax consultancy that will work with you flexibly and remotely, so you’re not limited to just those in your local area. They should also (preferably) specialise solely in R&D tax and funding, rather than being a generic accountancy firm. Also, go for one which has experience in claiming for your industry. So you may want to Google “R&D tax specialists in London” or “R&D Tax Credits in the construction sector”.
A good R&D tax claims company will also offer you a bespoke service and a very high (hopefully 100%) success rate. However, they shouldn’t require any payment upfront, instead working on a success-only fee basis. They’ll also spend time compiling and submitting your claim for you, as well as dealing with any queries along the way.
Latest HMRC statistics show that for the year ending March 2020, 85,900 UK R&D tax relief claims were made. That’s a staggering 16% increase from the previous year. And with average claims topping £55,000 even for small companies, you won’t want to miss out.
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