R & D Tax Credits

We can identify, prepare and submit R & D claims to HMRC on your behalf

For SMEs, R & D relief is an uplift in qualifying expenditure resulting in tax relief being granted on up to 230% of actual expenditure incurred in relation to Research & Development activities.

For profitable companies the claim provides a valuable reduction in their corporation tax liability, whilst loss making companies can choose between carrying forward the relief against future profits or surrendering the relief and receiving cash refunds.

If both the company and project meet relevant criteria for the SME regime, the financial benefit is typically around 25% of the project cost, although it can rise to as much as 33% in some cases.

Larger companies may qualify for Research & Development Expenditure Credits (RDEC), effectively a grant against their R & D costs. This scheme is less generous, with a taxable cash contribution of 13%, given as either a reduction in the corporation tax liability or a cash grant.

Whether claiming under the SME or the RDEC scheme, the basic criteria are the same. 

The   R & D project must “seek to advance knowledge by resolving technical or scientific uncertainties”. These advances must be applicable industry wide, not merely within your business, and must be such that a competent professional working in the field would not be expected to readily produce a solution.

Under either scheme claims should be submitted within two years of the end of the financial year in which the qualifying expenditure arose.

If you would like more information or believe you may have a qualifying project, please ask us for advice.