R&D TAX CREDITS
Research & Development (R&D) tax credits are a government tax incentive set up to give innovative companies money back for any costs they have incurred in this area of their business.
Essentially, they are the Government’s way of rewarding businesses that are developing new, or appreciably improving existing, products, processes, systems and materials — and thereby increasing the country’s wealth creation capacity.
HM Revenue & Customs states the following: “Your company or organisation can only claim for R&D Relief if an R&D project seeks to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty.”
R&D Tax Credits apply to businesses that are liable for Corporation Tax. They can help to reduce a corporation tax bill or can be claimed as a cash sum paid back to a company by HM Revenue & Customs, due to an over-payment of tax.
Types of qualifying R&D expenditure are typically staff costs, software, utility bills, and any subcontracted work and materials. These R&D costs can be accelerated up to 230%.
Research & Development tax relief can also provide a valuable cash injection to companies of all sizes that have not paid (or are not paying) Corporation Tax, through the R&D tax credit system. The purpose of tax credits is to incentivise companies that are not necessarily in a profitable position to take the risks inherent in innovation.
However, many companies, due to a lack of awareness or expertise, are not exploring their claim entitlement and are losing out financially as a result. This can often be to the tune of tens, or even hundreds of thousands of pounds.
Based on figures from HM Revenue & Customs, only a fraction of businesses in the UK are making claims for R&D. Just 15,930 claims were made in the 2112/2013 financial year by around 2.8 million active limited companies.
We are keen to raise awareness of this area of tax and to ensure that companies undertaking R&D receive the appropriate level of tax relief.
Benefits of our service
We provide a professional, multi-disciplined service:
Accurate and robust tax reports
Maximum R&D tax savings
Proactive and personal
Crucially, we do not require any upfront fees.