R&D Tax Credits UK

Urban Skyline

If your company is investing in research and development, you could be eligible for claiming Research & Development Tax Credit.

Every business is looking to innovate. With advancements in science and technology happening all the time, there is potential for innovation that could benefit businesses 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.

R&D Tax Credits Explained

The 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.

WHAT ARE R&D TAX CREDITS?

Research and development (R&D) tax credits are a government incentive rewarding UK companies that invest in the innovation of products, services and/or processes. It's a valuable source of money that helps businesses accelerate R&D, hiring new staff and encouraging company growth.

Scientist on Computer

Is Your Business Eligible?

Many UK businesses are unaware of how much they are truly entitled to, whether tax credits, refunds, exemptionsreliefs or business grant funding. To qualify for R&D tax credits, you must:

  • Be a limited company in the UK that is subject to corporation tax.

  • Have carried out qualifying R&D activities and worked on an R&D project that aimed to make an advance in science and technology - even if it failed.

  • Have spent money on the project/projects.

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 scheme for small & medium sized enterprises, and the Research and Development Expenditure Credit (RDEC) regime for large companies. The benefits differ based on the category your business falls under.

CLAIM UP TO 33% OF YOUR R&D COSTS 

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%

Image by Michael Longmire
R&D TAX CREDIT RATES

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. 

How to Claim 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 tax 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.

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.

Frequently Asked Questions

How does R&D Tax Credit work?


Businesses that spend money on developing/improving products, services or processes can claim R&D Tax Credit in the form of cash awards or corporate tax reductions.




What type of activities qualify for R&D Tax Credits?


R&D Tax Credits can be awarded to businesses in any sector, which is why the qualifying activities can range from developing products in a laboratory to refining specific manufacturing processes. The activities need to be carried out with the aim to advance science and technology and the project shouldn’t be easily solved or completed by a professional in the same field.




How much is an R&D tax credit claim worth?


R&D tax credits vary depending on your Research and Development spend. To make an R&D credit calculation, you need to identify your “enhanced expenditure”. Once you deduct your enhanced expenditure from your taxable profits, or add it to your loss, it will result in:

  • A Corporation Tax reduction if you are making profit
  • A cash credit if you are incurring losses
  • A combination of the two





Cap Ex Associates Tax Ltd

The Barns

Barston Gate Farm

Barston Lane

Barston

Solihull

West Mids B92 0JN

Tel:  0121 272 0801

Email:  lee.bould@capextax.com

Company number: 11166174

  • LinkedIn - White Circle

© 2019 by Cap Ex Associates. Designed by Spiderzone