What are R&D Tax Credits? | Ultimate Guide
Updated: Jun 22, 2021
What are R&D Tax credits?
Research and development (R&D) tax credits are a government incentive designed to reward UK companies for investing in innovation. They are a valuable source of cash for businesses to invest in accelerating their R&D, hiring new staff and ultimately growing.
Who is eligible?
UK based companies liable to pay corporation tax who:
Are seeking to overcome uncertainties within an industry
Are improving processes, services, materials, devices
Work requires trial and error to get to the end result
Have invested in failed projects or developed products that have never launched
Employ technical staff
Projects involve design and/or implementation
What can be claimed?
Staff costs (including employers pension and employers NI, but not benefits in kind)
Externally provided workers, e.g. agency staff (up to 65%)
Materials/consumables used directly in the R&D process
Power, water, fuel used directly in the R&D process
Subcontracted R&D costs can be claimed (up 65%)
How companies are categorised?
Employ less than 500 staff.
Have either an annual turnover less than 100m euros or a balance sheet under 86m euros.
SMEs can get back up to 33% of the amount they’ve spent on qualifying R&D.
RDEC (Research & Development Expenditure Credit)
Employ over 500 staff.
Have turnover over 100m euros and more than 86m euros on the balance sheet.
Large companies claim at around 10% and is shown as income on the balance sheet.
Advantages of R&D Tax Credits?
Receive a cash refund, lowered corporation tax bill or a combination of the two.
From initial inquiry to successful completion can be completed within 8-12 weeks. We work with specialist advisors who understand your industry and have experience in successful claims for businesses from a wide variety of sectors.
No Win No Fee
Our Advisers work on a No Win No Fee basis, get in touch to arrange a review, and within 8-12 weeks you could have an important cash injection into your business.