R & D Tax Credit Overview

Research and Development (R&D) reliefs support companies that work on innovative projects in science and technology. It can be claimed by a range of companies that seek to research or develop an advance in their field. It can even be claimed on unsuccessful projects. You may be able to claim Corporation Tax relief if your project meets definition of R&D.

Small or medium-sized enterprise (SME) R&D tax relief allows companies to:

• Deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction
• Claim a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss

To claim the relief you need to be a SME and show how your project meets definition of R&D. Companies who are making their first R&D claim can qualify for Advance Assurance. If Advance Assurance is granted, any R&D claims in the first 3 accounting periods will be accepted if they’re in line with what was discussed and agreed.

Companies that can claim relief

You can claim R&D tax relief if you’re a SME with less than 500 staff and a turnover of under €100m or a balance sheet total under €86m. If your company has external investors, this can affect your SME status. You may need to include the figures of connected companies and partner companies when you work out if you’re a SME.

You cannot claim SME R&D relief if the project is already getting notifiable state aid or you’ve been subcontracted by another company. However, you may be able to claim the R&D Expenditure Credit (RDEC).

Projects that count as R&D

The work that qualifies for R&D relief must be part of a specific project to make an advance in science or technology. It cannot be an advance within a social science – like economics – or a theoretical field – such as pure maths.

The project must relate to your company’s trade – either an existing one, or one that you intend to start up based on the results of the R&D.

To get R&D relief you need to explain how a project:

• looked for an advance in science and technology
• had to overcome uncertainty
• tried to overcome this uncertainty
• could not be easily worked out by a professional in the field

Your project may research or develop a new process, product or service or improve on an existing one.

We guarantee;

• We’ll review your expenditure to analyse potential tax refund claim
• Prepare the refund claim and submit to HMRC
• We’ll save your taxes

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At Tax Advisor, we are a team of dedicated and experienced professionals. Over the years, we have served many reputable firms in the UK and we are aware of the latest tax laws. This empowers us to offer the best tax advice and help handle your HMRC issues to secure the future of your business.

If your business qualify R & D tax credit criteria, our experienced team can help you get tax refund. Your trust is important to us and we work hard to give our clients the best experience in accounting & taxation services.

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