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Research & Development Tax Relief

R&D Tax Relief – How does it work?

R&D tax relief is the most valuable tax relief available to UK companies. HMRC actively encourage companies who are doing R&D to claim back up to 33% of their costs.

Qualifying companies can claim back costs incurred 3 years ago.

If you make profits, you can claim an immediate refund of corporation tax. If you are loss making, HMRC will pay you a cash credit of 33% of the amount you have spent.

If you qualify, you must claim, it’s that simple!

There are strict deadlines for claiming, so you should review this now before you miss a deadline. HMRC will not pay you if you have missed the deadline.

Who qualifies?

Limited companies carrying out qualifying R&D can claim.

So what is qualifying R&D?

If you can answer yes to these 3 questions, you’ll probably qualify:

  1. Have you had a technical goal as part of a commercial or research project?
  2. Was there at least one significant technical difficulty to overcome while trying to achieve this goal?
  3. Did you use people with appropriate skills and experience to carry out the work?

If you think you might not qualify but are not sure, don’t worry, we can arrange a short call to get to the bottom of it.

What costs can be claimed?

The main categories are:

  1. people costs (e.g. salaries, NIC, pensions, benefits, expenses, agency workers)
  2. materials
  3. subcontracted costs

If you’ve spent some money on the above categories as part of your R&D, you should be making a claim!

To help clients, we have linked up with our friends at Radish, the online R&D tax claims experts.

How does Radish work?

Their vision is to make valuable tax reliefs available to those who should receive them.

They have developed a digital platform that allows a company to answer a series of questions in about 45 minutes. This will provide all the information they need to prepare the claim.

They will prepare a robust report to provide to HMRC. A copy of this will also be passed over to us as your accountants so we can complete the relevant tax return.

Their fee structure is simple: 5% of qualifying R&D expenditure, payable on a contingent basis – they are only paid when you receive the benefit.

Interested?

Use this link to book in a 15 minute scoping call with one of Radish’s consultants. If you qualify, you can then book in to complete the rest of the information online in a 45 minute consultation.

One hour of your time, that’s all there is to it!

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