What are R&D credits?
Research and development credits are a government incentive, designed to reward UK companies for investing in innovation. They’re a valuable source of cash for businesses.
There really is no catch. This isn’t too good to be true, and it’s not used as an excuse for HMRC to initiate enquiries into a company’s finances.
R&D tax credits were first introduced by the government in 2000, to encourage businesses to invest in developing new or improved products. As detailed in the ‘HMRC – Evaluation of Research and Development Tax Credit report’, the government calculated that for every £1 of relief given back to SMEs and large companies, they should receive a return on investment of between £1.53 and £2.35.
Who can claim R&D relief?
Whatever the size of your company, if you are involved with developing new products, processes or services, or improving existing products, you are probably undertaking research and development. If your R&D satisfies certain criteria, you could be eligible for R&D tax relief.
In short, if you innovate and improve the way something works in your business, and if the outcome lacked certainty from the start, you are likely to qualify.
You don’t have to own or run a research company, and you don’t have to maintain a large R&D team.
If you’re still not 100% sure, a five-minute, no-obligation call with us will clarify your situation. We have the expertise to quickly understand your business and know whether your activities will qualify.
Simply send us an email, then we will call you or arrange a time for a call at your convenience. We will put you in front of a chartered tax adviser, to ensure that your claim meets HMRC requirements.
”I have known Louise over the last 7-8 years of her professional career … I have always found her highly professional and enthusiastic about her specialist subject and her desire to help.
Mike GardnerExecutive Chairman, Claremont
How is R&D relief calculated?
If you realise that you are eligible for a claim, you can make a claim yourself. This is often time-consuming and confusing. With us, the process will be simple.
It’s likely we will need a maximum of three hours of your time.
If in our opinion your business does qualify, we’ll work with you to substantiate the figures.
We then prepare a report and handle the submission of the claim and any communication with HMRC.
Thanks to the depth and breadth of knowledge that our technical directors, all chartered tax advisors, have in this highly specialised area of taxation.
Finally, once you have received your cheque from HMRC, we will help you to set up an accounting structure to make future investment in R&D easier to track and record. Then your next claim will be even easier.
The average R&D tax relief claim is approximately £67,000 per year. Payment of successful claims can often be made within four weeks of submission to HMRC.
Why is R&D relief often not claimed?
There are a number of reasons why companies aren’t claiming this relief. They include:
Lack of awareness
Even though R&D is 100% legitimate and encouraged by the government, not a lot of money has been invested in publicising this form of tax relief.
It’s our mission to spread the word, to help as many companies as possible to take advantage of the generous and beneficial payments available.
Businesses not realising they are eligible
Even if they’ve heard about this scheme, many business owners assume that only research or science companies are eligible, or they think they would need to run specific R&D projects and teams. In reality, companies from ANY industry or sector may be eligible.
We will help you uncover any eligible R&D work that could give you the tax relief you’re entitled to, which could provide a much-needed cash boost for your business.
Business owners being unsure of how to make a claim
With the general lack of awareness of R&D, it’s not surprising that business owners have no idea how to go about making a claim. Many also worry that the process will be time-consuming or expensive, and that they don’t have the resources needed to make a claim.
We’ll take away any of those concerns. We operate on a ‘no win, no fee’ basis, we won’t even start the process for you if we know you’re not eligible.
If you’re eligible for R&D tax credits, your rebate will far outweigh our charges to you.
What is the Patent Box regime?
The Patent Box regime is a generous HMRC-approved relief scheme, introduced in 2013 to encourage innovation in the UK. It is designed to encourage companies to keep and commercialise intellectual property in the UK.
The scheme taxes profits attributed to qualifying intellectual property (IP) at a lower corporation tax rate of only 10%, as opposed to the current rate of 19%, giving qualifying companies a considerable boost to their finances.
The Patent Box regime has been designed to reduce the corporation tax (CT) that companies pay on any profits that are obtained from qualifying intellectual property (IP). Fortunately, the scheme goes hand in hand with the existing and well-established R&D tax relief schemes.
Patent Box sounds good, but what’s the catch?
There really is no catch. The Patent Box regime has been designed to stimulate innovation and to benefit companies that undertake any qualifying research and development (R&D) and then patent their IP. This has been written into law and has already helped thousands of companies.
Some companies have even restructured their IP holdings to benefit from the regime.
As with the longer-running R&D tax relief schemes, the Patent Box regime is designed purely to stimulate the economy by incentivising R&D and innovation.
For further details, visit our FAQs page
