Introducing the most underclaimed company tax credit available.
Research and Development (R&D) Tax Relief rewards companies for innovation. It is an unmissable opportunity to claim either a reduction in corporation tax or, for loss making companies, a payable tax credit.
Most claims are for companies operating in the ordinary course of their business. This may include developing new products, processes or services or duplicating existing products and processes in an appreciably improved way. The development does not have to be blue sky innovation, as long
as the work being undertaken attempts to resolve some form of technical or scientific uncertainty.
Here we have tried to answer some of the questions you may have, please do not hestitate to Contact Us Here for more assistance
If you’ve got a query that’s not addressed here or anything isn’t
clear, please feel free to contact us! There isn’t a question about R&D tax relief we can’t answer!
What counts as qualifying R&D activity?
HMRC’s definition of R&D is purposefully broad. Regardless of size or sector, if a company is taking a risk by attempting to “resolve scientific or technological uncertainties” then it may be carrying out qualifying activity. This could include:
• Creating new products, processes or services.
• Changing or modifying an existing product, process or service.
Can I claim for aborted R&D projects?
Yes! R&D doesn’t have to have been successful to qualify.
The fact that a project has been aborted is often a good indicator that R&D has taken place.
How will I know if I qualify for R&D tax relief?
If you’re asking yourself this question, take comfort in the fact that most of the companies we deal with find themselves in this position. This is where a conversation with us is essential. If some kind of improvement has been attempted and a technical uncertainty can be demonstrated then there is a good chance the company will qualify. One point to note which often comes up in conversation with clients is whether simply improving the state of knowledge within the business qualifies for R&D tax relief. It’s important to note that the company has to be furthering the knowledge in a field of
science or technology and not just it’s own knowledge.
Can I claim if I’m a sole trader?
Unfortunately, R&D tax relief only applies to companies
What do HMRC need to approve a tax claim?
We have developed a reliable reporting strategy that provides HMRC with everything they need to approve a claim.This involves a comprehensive technical report outlining the projects which meet the qualifying criteria for relief as well as a detailed financial report which offers a breakdown of the costs included in the claim.
I’ve never claimed R&D tax relief before. Can I claim retrospectively?
Making a retrospective R&D tax claim follows the normal rules for amending any corporation tax return. Companies can claim up to two years previous
As an SME we’ve have received grant funding – can I still claim R&D tax relief?
The simple answer to this question is Yes! The interaction of grants and R&D tax relief can be complicated, but we’ve summarised the most common
situations below. I’ve received a grant which is notified state aid Common grants which fall under this category are Smart
I’ve never claimed R&D tax relief before. Can I claim retrospectively?
Making a retrospective R&D tax claim follows the normal rules for amending any corporation tax return. Companies can claim up to two years previous.
I am an SME and have received grant funding – can I still claim R&D tax relief?
The simple answer to this question is Yes! The interaction of grants and R&D tax relief can be complicated, but we’ve summarised the most common
situations below.
I’ve received a grant which is notified state aid
Common grants which fall under this category are Smart Grants and any grants which fall under the General Block Exemption Regulations (GBER). If you have received a notified state aid grant which is either specific to the project you want to claim R&D tax relief on or is non-specific (i.e. it covers
your general R&D activity), then any claim for R&D tax relief will have to be made under the less generous large scheme. However, if your grant is project specific, it’s important to note that other R&D projects which have been exclusively funded by the company will be eligible for the SME rate
What costs can be claimed?
HMRC have six clearly defined categories of qualifying expenditure. These are: staff costs, subcontracted R&D costs, Externally Provided Workers, consumables, software and certain energy costs
Can my claim trigger an enquiry by HMRC?
The R&D tax claim is just another part of your corporation tax return and normal enquiry window rules apply. We have extensive experience in dealing with enquiries concerning R&D tax claims. This gives you peace of mind, knowing that your claim will be handled by advisers with years of experience in dealing with HMRC
I’ve made a claim and I’m expecting money back. How long will it take?
If your claim is for an SME R&D tax credit, HMRC aim to repay monies due within 28 days. However, this is not a statutory requirement and many factors result in this target being missed. HMRC’s R&D units are extremely busy, particularly in December, March and September. Often, claims can take 3 or 4 months to process
What is the definition for an SME or large company?
There are two schemes. One scheme is for small and medium sized enterprises (SMEs) and the other scheme is for large companies. Generally speaking, an SME is a company with:
- Fewer than 500 employees AND
- Annual turnover less than €100 million Euros OR
- Total assets on the balance sheet totalling less than €86 million Euros
- A large company is one that does not meet the definition of an SME.
Our experts Alison Lynch and Natalia Shaw are on hand to give as much advice as you need. See their profiles on Our Team Page Here.
They would love to help you with your R&D claim, you may be surprised, so get in touch on 0208 686 7756 or info@oandk.co.uk
