R&D Tax Credits
If your company is investing in research and development, you could be eligible for claiming R&D Tax Credits.
Every business is looking to innovate. With advancements in science and technology happening all the time, there is potential for innovation that could benefit a business in every field. It doesn’t matter what sector you’re in or the size of your business, every investment into research and development is eligible for a tax return.
The expert team at CapEx can find out if your business is eligible for a cash payment based on your investment into research and development. Based in Solihull, in the heart of the West Midlands, we have helped local businesses in Dudley, Sandwell and Wolverhampton as well as nationwide businesses to leverage available funds.
What Are R&D Tax Credits?
Research and development (R&D) tax credits are a UK government incentive that rewards UK companies that invest in innovation of products, services and/or processes. It is a valuable source of money that helps businesses accelerate R&D, hiring new staff and encouraging company growth.
The government R&D tax credit scheme was introduced in the UK in 2000 to encourage UK companies, both in profit or loss making, to invest in R&D projects through the development, evolution or innovation using science or technology. The government realised that encouraging innovation is a way of improving productivity, performance and competitiveness in the UK.
R&D Tax Credits Explained
Many UK businesses are unaware of how much they are truly entitled to, whether tax credits, refunds, exemptions or reliefs as well as business grants. To qualify for R&D tax credits, you must be a limited company in the UK - no matter the industry - that is subject to corporation tax and has carried out qualifying R&D activities. The business must have worked on an R&D project that aimed to make an advance in science and technology - even if it failed.
You must also meet the necessary criteria outlined by the UK government. There are currently two types of R&D schemes in the UK: the SME regime and the Research and Development Expenditure Credit (RDEC) regime for large companies. The benefits differ based on the category your business falls under.
Our team of R&D tax experts can help identify which scheme you fall under and how much money can be claimed. For example, the SME R&D tax credit gives businesses on average a financial benefit of 25% of the R&D cost of a project. It’s possible that you could be eligible for up to 33%. Larger RDEC claims could see you claim cashback of up to 10%
Claiming R&D Tax Credits
With a huge pot of money waiting to be claimed by the UK's small and medium sized businesses, it’s time to claim back the R&D tax credits you are entitled to. To qualify for HMRC R&D Tax Credits, the work completed must be an advancement in science and technology.
To claim R&D relief your business will have to showcase how their work and project:
Attempted to achieve advance in science and technology (whether successful or not)
The Business overcame uncertainty or tried to do it
Could not be easily worked out by a professional in the field
The work/project completed by your business can be developing or improving a process, product or service in order to be eligible for R&D relief.
Current R&D tax credit rates mean SMEs can claim up to 33p for every £1 on qualifying R&D activities while large companies can claim up to 10p on every £1 spent. The average cashback to companies is around £50,000 and most companies don’t even realise that much of what they do is eligible.
Whether you own a small business in the West Midlands or a nationwide company with branches across the UK, CapEx Associates can assist you with applying for and claiming R&D Tax Credits.
Get in touch with our expert team today to see if you’re eligible to make a R&D tax credit claim.