Research and Development Tax Relief – The Ultimate Guide
R&D Tax Relief is a Government incentive which encourages businesses to invest in and develop innovative products. The innovation being sought could relate to a new business process or system, a new material or a new communications device, or an improvement on something which already exists.
HMRC has a set of conditions which they will apply when determining whether your R&D project is eligible for R&D tax relief, which ensures the project aims to achieve a genuine advance or improvement where a solution has not yet been discovered.
Who is Eligible to Claim?
It may surprise you to learn that any limited company, large or small, profitable or non-profitable, who can demonstrate they have carried out “research and development”, may be eligible to claim R&D tax relief. It is a myth that the R&D tax credit scheme is only relevant to science-based sectors. This is simply not the case as eligible R&D work can take place in any sector, providing the criteria are met.
We currently have several of our clients who are going through the process of claiming, with several who have already successfully claimed between £20k and £60k!
Also, it is the process involved in the work that count towards eligibility rather than the end result i.e. if a company creates something that looks identical to an existing product on the market, but it used a new or improved method to make it, it would be able to claim through the scheme.
To get an idea of whether your company qualifies to claim R&D Tax Credits, ask the following questions. If the answer to any of these questions is “yes” then it is probably worth exploring whether your company is eligible.
If you think you could be eligible to claim, please call Rachel at BKS Accounts, who can help you with your claim.