Claim Research and Development Tax Relief

Taking a Closer Look at Research and Development Tax Relief

Expert tax accountants, Spartan Accounting Group in London, can help you with Research and Development (R&D) Tax Relief. As a UK business owner, the chances are high that you may have heard about R&D Tax Relief at some point. If you are wondering what exactly this tax relief entails, then you are in the right place! In this blog post, Spartan Accounting Group will take a closer look at what R&D Tax Relief is, who is eligible to claim, as well as how much you can claim. First and foremost, the R&D Scheme is a government initiative, which aims to boost innovation in science and technology.

R&D is a Corporation Tax Relief that may reduce your company’s tax liability. It is important to know that you can only claim this relief if your company is liable for Corporation Tax. If this is not the case for your company, it could potentially be worthwhile to review the structure of your business. As a business owner, it is important to ensure that your company structure makes sense and is the most effective for you and your business. Additionally, it is available to both SMEs and large companies. Spartan Accounting Group’s expert tax accountants can also assist you with this process.

Specific Requirements That Qualify You For the R&D Scheme

The R&D Tax Relief Scheme supports companies that work on innovative projects in the science and technological fields. A wide range of companies are able to claim; these companies seek to research or develop an advance in their. Additionally, it can also be claimed on projects deemed unsuccessful. It is important to note that your project will have to meet the definitions of R&D, as set out by HM Revenue and Customs (HMRC), in order for you to claim tax relief. First and foremost, the work must form part of a project that seeks to make an advance in specifically science or technology.

R&D tax relief can’t be claimed on projects involved with advancing within a social science, such as economics, or a theoretical field, such as pure math. Additionally, the project must relate to your company’s trade. This could be an existing trade, or one that is planned to be taken up, based on the outcome of the research and development. In addition to your claim, you’ll need to explain how your project looked for an advance in science and technology, how you tried to overcome uncertainties, and that the advance could not easily be worked out by a professional in the field.

Which R&D Tax Relief Scheme is the Best for Me?

R&D Tax Relief thresholds differ mostly according to the size of your business. You can claim up to 33% if you are an SME with less than 500 staff and have a turnover of under €100 million, or a balance sheet total under €86 million. Your SME status could potentially be affected, should you have external investors. Furthermore, you may need to include the figures of connected companies or partner companies when you’re working out if you are truly an SME. R&D Tax Relief might also be unavailable to you if you’ve been subcontracted by another company. In these cases, you could possibly claim R&D Expenditure Credit (RDEC). R&D Tax Relief will also need to be claimed from the RDEC Scheme if you classify as a large company for the purposes of the R&D tax incentive.

The qualifying criteria for a large company includes employing over 500 employees, or having a turnover of more than €100 million, or more than €86 million in gross assets. The R&D tax credit rate for RDEC means that large companies could get over 10% of their R&D spending refunded. Costs you can claim include employee costs, subcontractor costs, software, certain consumables, and clinical trial volunteer expenses. If this all seems confusing, Spartan Accounting Group’s tax accountants can make the tax claiming process easier for you with our many years experience in the industry. Get in touch with Spartan Accounting Group in London today to find out how we can streamline your R&D Tax Relief claim.

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