Frequently asked questions about R&D Tax Credits.
Claiming R&D doesn't have to be complicated
Our experts have spent years refining their knowledge of R&D in a range of different industries, so you can be confident that your claim is in safe hands.
R&D tax Credits are a government incentive designed to stimulate growth and reward innovation to companies in the UK. The scheme has been running for over a decade and due to its success, has now been guaranteed until 2032. In a nutshell, if a business is spending money developing new products and trying out new things then they’re entitled to money back from HMRC whether this be in the form of a cash payment or money off existing and future corporation tax.
Put simply, companies who spend time and money developing new products, processes, or services; or bettering/simplifying existing ones are entitled to a percentage of this spend back from HMRC. Depending on a company’s Tax position they can claim back anywhere between 19% and 33% of eligible spend back as either a cash injection or money off their corporation tax bill. This is an invaluable scheme that allows companies to reinvest in their business and continue their growth.
Contrary to popular belief, the scheme is not solely targeted at people wearing white lab coats fiddling with test tubes; it’s much broader than that. As long as you are a limited company spending money on innovative projects and solving industry problems then there’s potential for you to make a claim. Essentially, anything that helps a business gain a competitive advantage in a new and innovative way could be eligible for tax relief.
Within an R&D claim there are 5 cost categories; Staff, Subcontractors, Externally Provided Workers (EPWs), Consumed & Transformed (materials) and Software. Within most claims, the Staff, subcontractors, and materials tend to make up the bulk of the costs but we consider all 5 in every claim.
Yes! Provided you are continuing to work on R&D projects you can take advantage of the scheme year on year. The scheme is guaranteed until 2032 so this is something that companies can utilise for many years to come.
Not necessarily, R&D Tax Relief is a very specific area of tax that most accountants aren’t specialised in. Some accountants do offer the service but most either haven’t got the time or the knowledge to complete a robust claim.
You can go back up to 2 financial years. For example, if your next year end is 31st March 2022, you can look at claiming for years ending 2020 and 2021. Once we pass March 2022 we lose the ability to claim the year ending 2020.
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