Research & Development Tax ReliefTax specialists in Sheffield, Doncaster and Northampton
R&D tax relief specialists
Research & Development (R&D) tax reliefs are HMRC incentives created to encourage innovation and technological advances in the UK. R&D tax relief is a widely available, but often overlooked tax relief.
An important point to remember is that to claim this relief, you don’t have to work in a lab or wear a white coat. We have submitted successful claims for IT & Software businesses, Food & Beverage businesses, as well as the more obvious Healthcare & Medical, Manufacturing and Engineering businesses.
Broadly speaking, the relief applies to companies undertaking projects which aim to seek an advance in science or technology. Guidelines set out by HMRC state that qualifying projects must constitute an advance in the overall knowledge or capability in a field of science or technology, not a company’s own state of knowledge or capability alone.
R&D relief may allow companies to reduce their corporation tax bills. For SMEs, you may be able to choose to receive a tax credit instead, by way of a cash sum paid by HMRC.
Since the introduction of R&D tax relief the rates of relief have increased significantly and the qualifying conditions relaxed. Subsequently, more companies than ever are claiming R&D tax relief on projects. Figures released by HMRC in September 2014 found that since the relief was launched over 120,000 claims have been made and £11.4bn in tax relief claimed. However, it is still believed that many companies who have qualifying projects are not claiming.
Many businesses are missing out – understanding qualifying R&D
The two main reasons for a company not claiming R&D tax relief are:
- They do not understand the tax legislation and claim process
- They do not realise that they have qualifying R&D projects
It is important to understand the broader range of qualifying activities for R&D to ensure that less obvious tax relief opportunities are not missed. It is often the case that many companies are unaware of which activities qualify as R&D; subsequently leading to many lost opportunities.
- Many do not realise that their project qualifies as R&D
- The cost of claiming is greater than the benefits
- Claiming relief is complicated (not with specialist advice)
For some projects it is easy to determine whether a project meets the qualifying criteria. However, because of the subjective nature of conditions, the basis on which a project qualifies relies on a number of factors and this can make it difficult to review the eligibility of many projects.
For example, some of the following key questions should be considered:
- What were the scientific or technological advances sought?
- How were the uncertainties overcome?
- Did the project have a clear purpose form the outset?
- Did the project achieve scientific and technological advances in the marketplace?
- Why was the knowledge being sought not readily deducible by a competent professional?
- When were the uncertainties actually overcome?
It is recommended that you seek professional advice from someone who has experience in dealing with HMRC and fully understands qualifying criteria for R&D tax relief.
After an initial assessment of the eligibility of the project, we can then submit the claim to HMRC.
Contact us for a free initial meeting
To find out more about how one of the leading firms of accountants in Sheffield, Doncaster and Northampton can help you, please contact one of our specialists. We believe in long-term client relationships and understand the importance of meeting to establish that you like us and we like you. This is why we offer all new clients a free initial meeting which will enable you to have a discussion about you and your business issues.
We look forward to hearing from you!