R&D

Accountants for R&D Tax Relief

If your company is involved in innovative projects in science and technology you may be eligible to claim Research and Development (R&D) tax credits. Various industries, including technology, pharmaceuticals, and agriculture, can benefit from R&D tax reliefs. Companies in any industry must meet specific criteria to qualify for R&D tax credits, and projects must seek to advance existing science or technology.

Even if your project is ultimately unsuccessful, you could claim Corporation Tax relief to offset some of the costs of your research.

We are experienced in supporting clients through the application process and successfully claiming R&D tax relief for a variety of clients in the science, IT and technology sectors. Our team can help you navigate the complexities of claiming R&D tax credits, ensuring you maximise your benefits.

A detailed technical narrative is crucial in the claims process to demonstrate compliance and eligibility.

Small But Impactful Development Projects

If your small or medium sized business invests money in research projects, you could claim SME R&D relief. Depending on whether your company is profit or loss making, you might be eligible to deduct an extra 130% of your qualifying costs from your yearly profit, on top of the normal 100% deduction, or you could claim an R&D tax credit worth up to 14.5% of the surrenderable loss. Qualifying expenditure includes specific costs associated with the R&D department.

Our experienced advisers will help you through the application process, defining your eligibility and identifying the relevant expenditure for relief. They will also help you maximise your R&D tax relief benefits. Development activities, including technical analysis and design, are crucial for claiming R&D tax relief.

Notable costs that can be claimed for reimbursement include staff costs, materials, and software. Other sectors, such as construction and retail, can also benefit from R&D tax reliefs.

Large But Effective

Research and Development Expenditure Credit (RDEC) is the tax relief that replaced the large company scheme in 2016, and allows large corporations, or SMEs who’ve been subcontracted to do R&D work by a large company, to claim a credit of 11% of all qualifying RDEC.

The corporation tax rate affects the value of R&D tax relief claims, influencing the overall benefit a company can receive. The production stage is crucial for finalising products or processes for full manufacturing or implementation.

Depending on whether your company is profit or loss making, the tax credit may be used to discharge the liability or result in a cash payment. Our tax advisors will support you through the process of applying for RDEC and help you define how your claim meets the government’s definition of R&D incentives.

Understanding your company’s tax position is crucial when determining the value of R&D tax credits. In both cases, the costs you can claim against include:

• Employee costs (salaries, wages, Class 1 NICs, pension fund contributions)

• Subcontractor costs

• Consumable items

Manufacturing companies often engage in R&D to innovate and improve their operations, benefiting from R&D tax reliefs.

Defining the start and end points of development projects is crucial for assessing R&D activities for tax relief purposes.

Get in touch to discuss your current and future projects, and whether your business could be eligible for R&D.

Call us on 0114 274 7576 and speak to our Director of Tax, Alex, or email alexandra.higham@knowleswarwick.com.