R&D Tax Credits.
Has your business carried out innovative projects involving research and development and looking to claim relief through R&D tax credits?
Our team has a wealth of experience assisting businesses in making claims for R&D tax relief and is here to help advise you on suitable investment options and ensure your business is being as tax-efficient as possible while maximising development opportunities.
What is Research and Development (R&D) Tax Relief?
Research and Development (R&D) Tax Relief is an incentive setup by the government to support and encourage innovative businesses and boost spending with R&D companies.
Companies from all sorts of different industries can claim the relief, even on projects that have been unsuccessful, so long as the work is part of a specific project to make an advance in science or technology.
What are the Different Types of R&D Tax Credits?
There are different types of R&D relief you can make a claim for, depending on the size of your company and whether or not the project was subcontracted to you.
Small and Medium Enterprises (SME) R&D Relief
SME R&D relief allows companies to deduct an additional 130% of their qualifying costs from their yearly profit on top of their usual 100% deduction, bringing it to a total of 230%
It also allows them to claim a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss.
You can claim SME R&D relief if you’re a SME with:
- Less than 500 employees
- A turnover less than £100 million or a balance sheet with a total below £86 million
You may be required to include any linked companies or partnerships when working out if you’re an SME.
Research and Development Expenditure Credit
Research and Development Expenditure Credit (RDEC) can be claimed by larger companies working on R&D or SMEs that have been subcontracted work on an R&D project for a large company.
The RDEC is a tax credit calculated at 13% of your company’s qualifying R&D expenditure and is taxable.
The credit may be used to discharge the liability or result in a cash payment depending on whether your company is profit or loss making.
Costs You Can Claim with R&D and RDEC
- Class 1 National Insurance contributions
- Pension fund contributions
- Specialist administrative or support staff who directly help the project
- Staff provided by external agencies for the project (65%)
Subcontracted work can be claimed for if it is undertaken by:
- A charity
- A higher education institute
- A scientific research organisation
- A health service body
- An individual or partnership of individuals
Consumable Items Used in the R&D Project
How Can Ryans Specialist R&D Accountants Help?
In order to qualify for R&D relief, you must be able to explain how your project:
- Searched for an advancement in science and technology (for a new process, product service etc.)
- Had to overcome uncertainty
- Attempted to overcome this uncertainty
- Couldn’t be easily worked out by a professional in the field
R&D Tax Relief isn’t always straightforward, so you may find that having an R&D accountant on your side helps to streamline and simplify the process.
Our team of specialist R&D accountants can help you to make your R&D claim and ensure you’re making the most of the tax relief available. What’s more, Ryans has a good working relationship with HMRC, meaning we’re well versed in what HMRC do and don’t approve of.
Our R&D services include:
- Advice on how and when to invest in projects
- Helping you to prove your R&D project to HMRC
- Calculating your expenditure on the project so you can submit an accurate claim
- Submitting your R&D report as part of your tax return
Get Help Submitting Your R&D Claim
If you need help with your R&D claim, please don’t hesitate to reach out to our team at Ryans to discuss how we can help you.