Research and Development (R&D) tax planning

Who can claim R&D relief?

In order to make a claim for R&D relief a Company has to demonstrate that it has achieved or aimed to achieve a technological or scientific advancement, this could include:

  • Advancing a product which already existing in the market place
  • Looking at ways of utilising different materials into a product
  • Improving a technical specification of a product
  • Resolving technical uncertainties in products

R&D tax credits for Small and Medium Companies

Under the SME scheme a company can utilise Research and development tax relief to enhance their deduction in relation to qualifying activities for Corporation Tax purposes to 230% of the actual R&D spend. This means that for every £10,000 spent on qualifying R&D will generate a Corporation Tax saving of £2,600. (Based on current CT rates)

Research and Development tax credit payment

For many tech businesses who are in the development phase of their business they may be in a loss making position, where this is the case they can elect to receive a research and development tax credit payment from HMRC.

Large Companies

The R&D relief available for Large Companies is significantly less than smaller Companies in terms of %’s but due to the volume of spend on projects it can usually lead to large value claims. For a large Company which spends £100,000 on R&D qualifying activities it’s additional corporation tax saving will be £6,000. With some claims being in excess of £1m it is possible to gain significant savings.

RDEC – Research and development expenditure credit

The large Company R&D scheme has been enhanced by the introduction of RDEC Research and development expenditure credit, although most Large Companies will be better off under the new scheme, we are able to calculate the saving using both methods and make the appropriate claim.

How can we help?

Our in house Chartered Tax Advisors have a vast wealth of knowledge and experience in advising owner managed businesses on how to maximise their claim to R&D (Research & Development) Tax relief and credits, we can help you to:

  • Identify qualifying Research and Development activities
  • Setup and review your accounting records to analyse qualifying R&D costs
  • Write a report for you which sets out the R&D claim to HMRC
  • Develop a methodology to assist in future R&D claims
  • Deal with any tax enquiries arising from any R&D claims
  • Advise on maximising your claims for R&D enhancement
  • Advise on making claims for Research and Development tax credit payment

So, whether your business has a niche product, is a manufacturing business or undertakes software development, you might not even know whether or not you qualify. For independent impartial advice on your ability to claim this valuable tax relief which could be worth £10,000’s to your business, give our tax team a ring to discuss your options.

What our clients say about our R&D work

“Charnwood Accountants have been proactive in saving us money by claiming legitimate tax allowances (such as Research & Development Relief) to which we are entitled.

They are also a great conduit for our dealings with HMRC.

Bi-annual review meetings are a great help in focusing our minds on what we should and should not be doing.”

Tony Liddar – Managing Director – MACS Sofware Ltd

So go ahead. Request your FREE meeting today. Enter your details in the form on the right of the page, or phone us direct on 01509 621833.