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R&D Tax Credits

Since 2000 there have been 240,000 successful Research and Development (R&D) Tax Credit claims.

In the tax year 2021-2022 there were over 90,000 R&D tax relief claims.
HMRC estimates that the total support for 2021-2022 was £7.6 billion.

R&D Tax Credits Explained

There are many businesses who can benefit from the relief

Background

R&D tax credit were first introduced by the Labour Government in 2000. These were designed to encourage businesses to invest in developing ‘new’ or ‘improved’ products. We can see from recently published HMRC statistics, that since 2000, there have been over 240,000 successful claims. As a result, over £21.4 billion of R&D Tax Credit relief has been claimed.

Many companies are put off by the words ‘Research and Development’. They often interpret the phrase as meaning that they have to be a research company, or maintain a large R&D team. In reality, if you innovate and improve the way something works in your business and the outcome lacked ‘certainty’ from the start, you may qualify.

Does your business qualify?

Your business has to be a limited company, subject to UK Corporation Tax and have invested money in R&D. If you fulfil this criteria there are two questions to ask to establish if your activities qualify for R&D tax credit relief:
If you are still unsure all it generally takes is a 30 minute phone call to the Fiscale team and we will be able to advise you either way. We have the expertise to quickly understand your business and know whether your activities will qualify.
If in our opinion your business does qualify, we will work with you to substantiate the figures, prepare a report and handle the submission of the claim.

Step By Step

The process for applying for R&D Tax Relief

Assessment

We establish if the activities you are undertaking, meet the criteria set out in the corporation tax legislation. This can either be done face-to-face or on a call.

Technical meeting

Following the initial meeting to establish eligibility, we will then arrange a follow up to get to know (and understand) the work that you are undertaking. Typically, this meeting takes two hours and involves going though potentially qualifying projects in detail. At this meeting we will talk to the members of your team who are involved in the R&D, along with your financial team. We will also outline what is involved in processing a claim and the level of input required by your team.

Draft report

As a result of the in depth technical meeting, we are then able to draft a report that is based on our discussions and all of the information that you have provided. We will be looking at every angle of your R&D, to ensure that we maximise the value of your claim.

Submission

Once the report has been agreed by you, we then submit it to HMRC and deal directly with them on your behalf. You have the peace of mind that the report will be an accurate representation of your activities. We will also ensure that it is presented in a way that meets the requirements of HMRC.

Review

Once the claim has been made, we will review your systems to help identify any areas of record keeping to support future claims. As a result, all future claims can be streamlined, making the process more straightforward.

The Benefits For Business

The R&D tax credit initiative makes economic sense for the government, which is why it has been supported and improved since 2000 by successive governments. Claiming R&D tax credit also makes economic sense for eligible businesses.

Reduce tax liability

For profit making companies, a reduction in the corporation tax bill

Cash credit

For loss making companies or those with lower tax liabilties, a cash credit can be paid to the business

Improved accounting

Improvement in systems during a detailed analysis of activities and costs

Future innovation

R&D tax credits help fuel motivation for further innovation

Get ahead

Increased efficiency and innovation help a business to enhance its competitive edge

Giving back

R&D tax credits allow companies to make positive contributions to UK Plc.

Large companies

For accounting periods starting before 1 April 2024, if you are a Large Company and you are involved with developing new products or improving existing products you are probably undertaking research and development (R&D). If your R&D satisfies certain criteria you could be eligible for tax relief through the Research and Development Expenditure Credit (RDEC) Scheme.


Small and Medium Sized Enterprises

For accounting periods starting before 1 April 2024, if you are an SME and your company is involved with developing new products or improving existing products you are probably undertaking research and development (R&D). If your R&D satisfies certain criteria you could be eligible for tax relief through R&D tax credit.


Do You Think You May Be Eligible?
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