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.
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:
- Have you had a technical goal as part of a commercial or research project?
- Was there at least one significant technical difficulty to overcome while trying to achieve this goal?
- 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:
- people costs (e.g. salaries, NIC, pensions, benefits, expenses, agency workers)
- 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.
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!