R&D Tax Credits

R&D Tax Credits are a government incentive designed to reward UK companies for investing in innovation. They are a valuable source of cash for future investment in accelerating their R&D, hiring new staff and ultimately growing the business.

Companies that spend money developing new products, processes or services; or enhancing existing ones, could be eligible for R&D Tax Credits. If you’re spending money on innovation, you could make an R&D Tax Credit claim to receive either a cash payment and/or Corporation Tax reduction. The scope for identifying R&D is huge – in fact, it exists in every single sector. If you’re making a claim for the first time, you can typically claim R&D tax relief for your last two completed accounting periods.

We help companies across all sectors with claiming R&D Tax Credits, leaving them with more time and cash to re-invest in their business.

Our team of Chartered Tax Advisers will ensure that no stone is left unturned confirming you have a robust claim identifying all the qualifying R&D costs.

Our end-to-end service offers you the best possible advice, preparation and submission of your R&D Tax Credit claim. Whilst our strong and long-existing relationship with all the HMRC R&D Tax offices completes peace of mind in regards to compliance.

Our risk-free contingent service encompasses more than just a claim submission. We are here to advise you on the best possible ways to maximise your entitlement year on year and our wider group of tax advisory and accounting services mean we can offer professional and reliable advice across all financial aspects of your business.

Below are some of our customers Frequently Asked Questions:

What are R&D Tax Credits?

In 2000, HMRC introduced the R&D Tax Credits incentive to help fuel the UK’s Innovation growth, so that the UK can compete on a global scale as a leader in Industry. Since then, it has been utilised by many SME’s to develop new products and improve existing processes. It’s a common misconception that you have to be working within a Scientific field to be eligible for relief.

The R&D activity will start when you begin working to resolve the uncertainty. You’ll need to identify the technical uncertainties that need to be resolved and make sure there isn’t an existing solution that has already been made available.

R&D Tax Credits explained

Encouraging growth for companies that are seeking to achieve an advance in Science or Technology.
R&D relief is a valuable government tax relief that rewards companies in the UK for investing in innovative projects, that lead to an advancement in their fields. Since it’s conception in 2000 many companies have relied on Tax Credits to fuel growth for the future. However, there is still a high percentage of companies who mistakenly believe that their company or sector does not qualify to make an R&D claim.
But how does it work? In a nutshell, you must be able to demonstrate to HMRC that the product or service you are planning to include in your claim is, at a technological level, an advance on what is currently in the market. If you are investing in innovative projects, you can make an R&D Tax Credit claim to receive either a cash rebate and/or Corporation Tax reduction backdating for your last two accounting periods.

Will I qualify for R&D Tax Credits?

More companies qualify for the relief than you may first think. You don’t need to be in a lab coat undertaking cutting edge research. This is one of the big misconceptions across the R&D Tax Credits incentive.

If your project tackles technical challenges that are not readily deducible from common industry knowledge, then the work you undertake trying to find the solutions to these problems could qualify for this incentive.

How much can I claim?

If you fall under the SME incentive you can deduct another 130% of any qualifying R&D costs from your annual profits, in addition to the normal 100%. Making a total deduction of 230%. If the company is loss-making you can claim a Tax Credit worth up to 14.5% of the surrenderable loss. Large companies can apply for RDEC which is paid at 12% of qualifying R&D expenditure.

What are the eligible costs?

The expenses your company incurs in trying to overcome these scientific or technical challenges can form the basis of an R&D Credit application:

  • Expenditure on staff including salaries, employers NIC & pension contributions
  • Expenditure on externally provided workers
  • Expenditure on sub-contracted R&D activities
  • Expenditure of consumables and materials (inc. heat, light, power and water)
  • Expenditure on software and relevant software licences

How many times can I claim?

As long as your company is taking a risk by innovating, improving, or developing a process, service or product, then it will more than likely qualify for Research & Development Tax Credit relief in the form of a cash rebate or a reduction in your Corporation Tax.

Which scheme can I apply for?

There are different schemes your company may apply for when it comes to R&D tax relief depending on the size of your company and whether the project has been subcontracted to you or not.

The two schemes are the SME R&D Relief and Research and Development Expenditure Credit (RDEC).

We have a service which far extends the initial report submission. Anytime HMRC enquires about your report, we will be on hand to talk to them directly.

How much time will I spend applying for R&D Tax Credits?

Compiling all the relevant financial and technical information to submit your R&D claim can seem like a mountain to climb but we have spent years streamlining the R&D application process and assembling an experienced team to make the process as easy as possible.

We have dedicated technical specialists that understand the backend functionalities of your development process’ and the ever-changing landscapes of your industry. This ensures that as a business owner your time is spent running your business whilst we focus on writing a report with market-leading attention to detail.

Get in touch today to speak to one of our advisors to how we can help to see if you have a claim. Call us on 0333 009 0801 or email us info@signaturetax.co.uk