Research & Development Tax Credits (R&D)
At Richardsons we specialise in helping companies to claim R&D Tax Relief. Our team has significant experience in this field and can help to make the complex process simple for you from start to finish.
R&D Tax Relief helps companies that incur costs when improving or developing new products, processes or services. A successful claim could mean a significant reduction in a corporation tax bill, or even a cash payment from HMRC. Many companies are unaware that they qualify, and that claims can even be made on unsuccessful projects.
Questions we are often asked about R&D include:
1) Is my company eligible for R&D Tax Credits?
Any qualifying company can make a Research and Development Tax Credit (R&D) claim whether large or small.
To claim R&D Tax Credits under the SME scheme a company must have a headcount below 500 and turnover below €100 million or gross assets below €86 million.
Where grants and subsidies are received, there can be restrictions on claims under the SME scheme.
2) How do I claim R&D Tax Credits?
R&D relief is claimed through the company’s Corporation Tax return for the period to which the expenditure relates.
The deadline for submission of the claim is two years following the end of the accounting period in which the costs were incurred.
3) What costs can I claim?
The allowable expenditure includes five main areas:
- Staff Costs
- Externally Provided Workers
4) Which projects qualify for R&D Tax Credits?
Any project which attempts to resolve a scientific or technological uncertainty can be included in the claim.
This is not just ‘white coat’ science, we have also made claims for software companies and engineering firms.
R&D can be claimed for the period where there is an uncertainty which is identified, and there is work being completed to resolve it.
A failed R&D project still qualifies for relief.
As at April 2023 SME claims are being processed within 40 days and RDEC claims are being processed within 40 days. HMRC aims to process all SME claims within 28 days and strives to provide the same level of service to RDEC claims.
“We have worked with Richardsons from the beginning of our journey as a start-up and continue to use their services as we scale commercially. Richardsons are a fantastic firm, flexible and responsive with a huge range of capabilities under one roof. Whenever I have picked up the phone to ask a technical question on anything from grant audit processes, R&D tax claims or management accounting practice, I have always received well considered answers and decisive action. I can’t imagine getting the sort of service we get from Richardsons from one of the larger firms”
Pete Armstrong, CEO of environmental tech Oxford Spin-out, Mixergy
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