Research & Development Tax Relief (R&D)


HMRC’s tax incentives for companies investing money in R&D are not new, but it is only in recent years that the number of SME’s taking advantage of the relief has increased significantly.  Still there are businesses who are likely to qualify for the relief who are not yet making a claim.

With all the negative press about tax avoidance and the increased aggressiveness in HMRC’s approach, it is important to remember that R&D tax credit relief is just that – a tax relief that has been written into the tax legislation.  It is there to encourage businesses to undertake R&D in the UK in order to stimulate our economy and create jobs.  With this in mind, the relief for SME’s has become increasingly generous over the years and can lead to significant cash savings.

For every £1,000 of qualifying R&D expenditure incurred after 1 April 2015 there can be a saving of tax paid of £260.  Alternatively, for loss making companies, a cash tax credit of between £189 and £333 can be obtained (depending on the pre-R&D tax position of the company.)

What is R&D?

To qualify for R&D tax relief you most definitely do not need to have anyone in your building wearing a white coat!  If you can answer yes to one or more of the following questions then you may qualify for the relief:

  • Have you embarked on a new venture that has required a significant investment of time to understand how appropriate products or processes may be developed?
  • Have you developed knowledge in your company that is not readily available in the market place and that would not easily be deduced by a competent professional in your industry?
  • If you had a meeting with your competitors and told them what you were doing in terms of developing your products, processes, materials or services then would they be impressed?
  • Are you or do you employ in your business technical specialists in your industry – eg well qualified, more highly paid, harder to recruit staff?
  • Are there any projects you have done that could have led to something being patented (if you had wanted to do so)?
  • Have you worked on trying to develop new products or processes that have failed due to technological or other difficulties?

What do I do now?

Come and talk to us at Burgis & Bullock.  We are working with many companies at the moment in helping them make R&D claims.  We will have an initial conversation free of charge to help you decide whether a valid claim could be made or not.  Why not ask? Call us today on 0845 177 5500 or contact us on-line.

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