R&D Tax Credits FAQ’s

Do I qualify for R&D tax credits?

R&D tax relief is a benefit available to companies under the UK tax regime. If your company is attempting to develop or build something new or improved that  has technical challenges associated with it, then it may very well qualify for R&D relief.

Your company’s project does not necessarily need to take place in a particular sector or even have a successful outcome but it must have a degree of ‘technological or scientific uncertainty’ that is resolved through your work. I.e. the technical staff either don’t know what the solution is to a particular technical challenge, or how to achieve the solution in practice.

You can claim for projects that has had expenditure in your current financial year and also retrospectively for up to 2 prior years.

How much can I claim?

Your company’s claim amount will depend on a number of factors with the most important one being the qualifying R&D expenditure – the amount your company has spent on qualifying R&D activities.

As a ‘rule of thumb’, a company meeting the definition of a Small or Medium Enterprise (SME), can claim back 24.7% of R&D expenditure if profit-making, and 33.35% if loss-making.

If a company cannot claim under the SME scheme, because for example, it doesn’t meet the financial or criteria to be considered as an SME, or work has been subcontracted to it, it may still be able to claim Research & Development Expenditure Credits (RDEC) which is worth 11% of qualifying R&D expenditure.

Is our intellectual property protected when making a claim?

Yes. HMRC will not share information about any project and will only use information provided to assess the validity of a claim, and we use confidentiality agreements with all of our clients.

Can I claim R&D tax relief and a grant?

You cannot claim SME R&D tax credits if you are receiving any other notifiable State Aids for the same R&D project. However, eligible expenditure will qualify under the RDEC scheme.

How long will it take to receive an R&D tax credit?

From an initial meeting with you, claims take on average 8 to 10 weeks before the benefit is received. HMRC advise that their processing of claims can take between 4 to 6 weeks. Read more: How Long Does it Take to Claim R&D Tax Credit? »

Which industries qualify for R&D tax relief?

The scheme is not restricted to any particular industry, as long as you are achieving an advance in science or technology. This means it can apply to industries from software to footwear, and disciplines from process engineering to industrial design.

What areas of company activity count as R&D?

The majority of the costs need to be related directly to the R&D, and are only applicable while the uncertainty is being resolved – in other words, while you are researching or developing. Aesthetic design and marketing would both be excluded, but functional design and feasibility reports may well be included.

Have a Questions?

Our helpful team will be in touch to help.

Ready to apply?

If you’re ready to apply for R&D tax refund, please call us on the freephone number below or use the contact form and one of our helpful team will be in touch to help.

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