Companies that spend money developing new products, processes or services; or enhancing existing ones, are eligible for R&D tax relief. If you’re spending money on your innovation, you can make an R&D tax credit claim to receive either a cash payment and/or Corporation Tax reduction.
Research and development tax credits are a government incentive designed to reward UK companies for investing in innovation. They are a valuable source of cash for businesses to reinvest back in their company to accelerate R&D, hire new staff and ultimately grow.
The scope for identifying R&D is huge – in fact, it exists in every single sector. And if you’re making a claim for the first time, you can typically claim R&D tax relief for your last two completed accounting periods.
The answer may well be “yes.” R & D credits are available for any company which can demonstrate it is researching and introducing innovative products, or developing procedures or systems which enable them to operate more efficiently and produce higher quality products and/or services. This can be across all industries – you don’t need men in white coats working in laboratories to qualify!
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Work that advances overall knowledge or capability in a field of science or technology, and projects and activities that help resolve scientific or technological uncertainties, may qualify for R&D relief.
To qualify the company must be carrying out research and development work in the field of science or technology. The relief is not just for lab based scientific research but also for development work in design and engineering that involves overcoming difficult technological problems.
This can include creating new processes, products or services, making appreciable improvements to existing ones and even using science and technology to duplicate existing processes, products and services in a new innovative ways.
If you are a small or medium sized company you can either get additional tax deductions on qualifying costs (saving you around £46 in tax for every £100 you spend on qualifying R&D) or, if you have tax losses, you may be able to sell these back to the government, netting cash back of £33.35 for every £100 spent on qualifying R&D.
Many of our clients have enjoyed five or six-figure sums. Complete the form below and we'll give you a view without obligation.