Research and development (R&D) tax relief is a valuable tax relief that can significantly reduce your company’s corporation tax payment, and even get you some cash back.
What is R&D Tax Relief?
R&D tax relief is a means of encouraging companies to innovate through a cash reward for developing new technologies to substantially improve products, processes, devices, materials and/or services.
The R&D tax credits are available to all companies and we have prepared claims not just for traditional manufacturing and engineering companies, but also high technology companies in software, aerospace, automotive and energy. But don’t think you are excluded from making a claim if your business is engaged in a different sector. If you have a problem in your business and use some element of science or technology to try to fix it, then you might have the potential for a claim.
All companies, large and small, can claim if they undertake qualifying work – even if they do not pay corporation tax because they are unprofitable. The development does not need to be successful – abortive or failed projects can be included also be included in the claim.
What is R&D Tax Relief Worth?
The additional tax relief can effectively deliver a tax repayment of 26% of qualifying R&D costs for small and medium-sized companies.
Costs incurred in undertaking eligible development work can qualify for enhanced tax relief include:
- Staffing costs and agency workers – for time spent directly and indirectly on R&D.
- Consumable items – including power and water costs, software used for R&D.
- Certain payments to sub-contractors.
- Prototype costs.
A claim for R&D tax relief and credits must be made within two years of the expenditure being incurred, depending on the date of the company’s accounting year end.
How can we help you?
Our R&D tax specialists have an excellent track record in making successful R&D tax relief claims for companies and have generated significant tax savings for our clients. We aim to make the process as seamless as possible and due to our wealth of experience we can make the process quick and efficient. We look to understand our client’s business and can therefore use this understanding to generate projects with a potential claim that others will miss.