Claiming tax relief on research and development
‘If we knew what it was we were doing, it would not be called research, would it?’
Einstein made a good point. However, if you want to claim enhanced tax relief against your company's R&D activities, you'll need to make a strong case for your research to HMRC. You'll need to demonstrate that your business innovates, improves or develops a product, service or process that is designed to advance knowledge by resolving general scientific or technological uncertainty.
Is my business eligible?
There's no minimum expenditure to qualify for this tax relief and there's no need for your company to have its own dedicated R&D department or to operate in any particular business sector.
- Qualifying small to medium-sized enterprises (SMEs) can claim tax relief at the enhanced rate of 230% on R&D spending. This includes the cost of staff, materials, utilities and computer software - equivalent to a tax saving of 43.70% of your Research and development spending.
- SME’s that don't pay corporation tax can instead claim a payable tax credit equivalent to 33.35% of the relevant expenditure.
- The project must be related to your company’s trade or a trade your company intends to start up subject to the results of the R&D.
How do I make an R&D tax relief claim?
Our Tunbridge Wells team are experts in handling research and development tax relief claims. Our accountants can help you make sure your claim meets HMRC's specifications, which include an explanation of:
- the scientific or technological advance sought
- the scientific or technical uncertainties involved in the project
- how you overcame these uncertainties
- why the knowledge sought was not readily deducible and therefore required R&D.