If your company is investing in research and development, you could be eligible for claiming Research & Development Tax Credit. 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.
Many UK businesses are unaware of how much they are truly entitled to, whether tax credits, refunds, exemptions, reliefs 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.
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 and technology. The government realised that encouraging innovation is a way of improving productivity, performance and competitiveness in the UK.
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 income that helps businesses accelerate R&D, hire new staff and encourage company growth.
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.
To claim R&D tax relief your business will have to showcase how their work and project:
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.
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We document the latest updates on R&D, stamp duty land tax, embedded capital allowances and business grants.
With over 25 years of experience, we have helped clients big and small to claim government money through funding, reclaims and relief.