R&D Tax Credits
R&D Tax Credits
The research & development (R&D) tax credit is designed to encourage innovation and increase spending on R&D activities for companies operating in the UK. It is one of the UK government's top incentives for encouraging investment in research and development and allows up to 33.35% of a company's R&D spent to be recovered either as a reduction in Corporation Tax or a cash repayment. On an average HMRC anticipates close to £6bn in R&D tax credits will be claimed for R&D costs annually, corresponding to £31.3bn of R&D expenditure.
Who is eligible?
Any company in any industry may be eligible for R&D tax credits. The key is that the company must be undertaking development activities that seek to achieve an advancement in technology.
What are they worth?
If you're a profitable SME you can expect about 24.7% of your R&D costs refunded. If you're a loss-making SME, you can expect about 33% back.
How to claim?
Claims are made through your Company's tax return and by submitting the R&D tax claim report to HMRC for assessment, and our expert tax adviser will help you all the way and good news is you only pay us when your claim has been approved by HMRC.
What are the key benefits of R&D Tax Credits?
R&D tax credits can be a valuable form of financial support for all businesses. In addition, it is helping businesses across all sectors in the UK develop some of the world's leading products, processes, and services.
What’s the process to claim R&D tax credits?
R&D tax credit claims are monitored and processed by HMRC and you can make a claim going back two accounting periods from the end of your current financial year. Although it is not a legal obligation, we recommend that an R&D technical report is produced that justifies the technical advancement and uncertainties as well as details of the eligible expenses that are being claimed on a project-by-project basis. To maximise your R&D claim, we recommend speaking with an R&D tax specialist to ensure you're not leaving money on the table.
R&D Tax Credits provide an essential source of non-repayable funding for many small, medium and large enterprises.
Every £1 spent on public R&D delivers approximately £7 of net economic benefit to the UK and unlocks £1.40 of private R&D investment.
R&D Tax Credits help encourage businesses to invest in R&D and innovation.
R&D Tax Credits help put the UK at the forefront of R&D and innovation across the globe. This has been proved during the recent pandemic and with the help of British government this will be an upward trend.
Eligibility for R&D Tax Credits applies to any industry but here are some examples:
- Renewable Energy
- Fire protection
- Food & Beverage
- Oil & Gas
- Information Technology