R&D tax credits - get paid for innovating
Updated: Jan 15
Do you want to get paid for innovating?
R&D Tax Relief is available to UK limited companies, using science or technology as part of an innovative process/product. The technology must be innovative; being commercially innovative is not enough.
There are two variants of the scheme – large company (RDEC) and small company. Small companies that have received subsidies or grant funding may need to use the large company scheme.
The small company’s scheme is much more beneficial – paying the company upwards of 19% (typically 24.75%, maximum 33.35% depending on taxable profit/loss) of qualifying R&D costs. The large company scheme typically benefits by just under 10% of R&D cost.
The specific questions an R&D consultant answers to demonstrate a qualifying project varies. The basis is the key points in the BIS Guidelines. Good questions to consider include:
what was the advance in knowledge or capability in an area of science or technology that was being sought?
what was the baseline in the science or technology from which the advance was sought or in what way does the project go beyond what was the current state of knowledge or capability?
what the R&D project was and if relevant, what the larger commercial project was?
the particular scientific or technological uncertainties that needed to be resolved to seek the advance?
why the knowledge or capability sought was not readily deducible by a competent professional in the field?
when the particular uncertainties were overcome?
how were the uncertainties overcome?
why were the uncertainties not readily deducible by a competent technical professional in the field?
what costs are associated with resolving the uncertainties? Are those costs qualifying?
You need to understand the context of the HMRC Guidelines to fully understand these questions. They are about more than just an individual understanding of the words. The Guidelines are lengthy and don’t even clearly explain every term but explain many of them; but if you do understand them and can describe an overall advance in a field of science or technology being attempted, and the associated scientific or technological uncertainties, you have the basis of an R&D claim. Our experienced Consultants will help simplify the process as much as possible and can relate the Guidelines to your specific industry sector and business activities.
Is an R+D claim worth it ?
Yes. Anyone who says they don’t involve some work is lying or lucky (not to have been caught out doing it wrong). But it is well worth it as on average our clients have claimed over £103k each. It is worth the effort. Our Consultants do everything they can do to make the claim process as easy as possible.