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Making the most of R&D relief - news article image

Making the most of R&D relief

4 Nov 2019

2 minute read

Research and Development (R&D) tax reliefs were introduced by the UK government to reward companies for investing in innovative projects in science and technology.

  • The UK government is investing billions of pounds for claims over the coming years and the definition of qualifying companies is wider than you might expect
  • R&D is a Corporation Tax (CT) tax relief that may reduce your company’s tax bill if your company is liable for CT or, in some circumstances, you may receive a payable tax credit

The manner in which this reduction is brought about will depend on the size of the company.

Small or medium sized (SME)
From 1 April 2015 the relief a company can get has increased to 230% on their qualifying R&D costs. Loss-making companies can in certain circumstances surrender their losses in return for a payable tax credit.

Large companies
Research and Development Expenditure Credit (RDEC) is a tax credit for 12% of your qualifying R&D expenditure up to 31 December 2017 and 12% from 1 January 2018. For loss making companies the tax credit is fully payable (subject to certain restrictions).

  • What costs qualify for R&D relief?
  • Direct staff costs
  • Externally provided workers
  • Software
  • Clinical trial volunteers
  • Prototypes
  • Subcontractor costs
  • Consumable items (ie materials & utilities)

How we can help?

  • Analysing prescribed terms and group structures to ensure claims are made correctly under the SME or large company
  • Preparing detailed R&D claims that take full advantage of the benefit and create a clear practice for future claims
  • Reviewing existing claims to ensure they are maximised and the right format
  • Facilitating workshops on the definition of R&D
  • Advising on effective practises for preparing claims
  • Training technical teams to identify relevant projects to the finance teams when preparing claims
  • Concluding ongoing HMRC enquiries in a cost-effective manner
  • Apply for advance assurance that a claim will be accepted, which can facilitate successful claims during the first 3 accounting periods

Our R&D Tax specialist team has science & technology experience that allows us to gain in-depth understanding of the R&D being carried out by our clients.

Our team have a deep knowledge of the legislation and guidance with practical experience of making claims in a wide range of sectors and negotiating these claims with HMRC.

We have an excellent working relationship with HMRC and have a proven record of achieving the maximum claims possible.

Making the most of R&D relief - news article image


Leigh Smith

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