To encourage innovation the government has been offering generous tax reliefs for companies engaged in research and development (R&D) for several years now.
Often an assumption is made that only companies such as scientific or medical research companies are eligible. However, these tax incentives in fact potentially apply to a very broad range of activities and you may well qualify.
Even if you are not yet making a profit you can benefit from the relief too
We get to know your business operations, how you are innovating and work with you to prepare R&D claims and much more:
Essentially, if your company is engaged in projects which seek to achieve an advance of some sort in overall knowledge or capability in a certain field of science or technology, then you could be classed as being engaged in R&D activity.
Additionally, you do have to be able to demonstrate that the advancement was not readily deductible by any competent professional in the field. In practical terms, a broad range of activities could be included. Some examples are:
- Developing a new product
- Improving an existing product
- Creating a new process
- Creating certain computer software
Different because you are
We pride ourselves in providing individually tailored services to our clients. Whatever your aspirations and priorities in business and life, we will be by your side with expert advice from local specialists. It is because your needs are unique, that the solutions we provide are distinct and personalised to you.
The types of costs that can qualify for R&D tax incentives include:
- Staff costs for employees involved in the R&D, apportioned based on their time spent on the qualifying activities
- Costs of subcontractors or externally provided workers assisting the R&D (usually restricted to 65%)
- Software used in the R&D, apportioned between qualifying and non-qualifying activities
- Costs relating to items consumed in the qualifying activities, such as materials used in creating a prototype or testing a process. Fuel, power and water may also qualify
It may well be that your company is already engaged in some of these activities and you could qualify for this generous incentive. Small and medium sized companies are eligible to claim an additional 130% tax relief on all qualifying expenditure.
It may well be that your company is already engaged in some of these activities and you could qualify for this generous incentive. Small and medium sized companies are eligible to claim an additional 130% tax relief on all qualifying expenditure.
For example:
Company A spends £50,000 developing better packaging to maintain the quality of their product
R&D tax relief will allow an additional £65,000 to be deducted from the company's profit for tax purposes
This means the overall reduction in the company A's tax bill as a result of the R&D expenditure is £12,350
We have built up a considerable amount of experience since the incentives were first introduced by the UK government at the turn of the millennium, we have helped companies of many different sizes, across multiple sectors claim tax relief on their R&D expenditure. Get in touch to speak to one of our R&D specialists.
Research and Development Articles
Research and Development tax relief for farming companies
Key partners and staff
Colin Chamberlain
Manager
Mary Schofield
PartnerFAQs
Why might I need Tax Investigation Cover?
Lovewell Blake Tax Investigation Cover will pay our professional fees for dealing with an HMRC investigation or enquiry.Our cover is market leading and there is no excess to pay. In the event of a tax investigation or enquiry we can handle everything including all correspondence with HMRC and even host meetings with the Inspector on your behalf.
Even if you have done nothing wrong it can take time to prove this to HMRC and deal with their letters and enquiries. Many of our clients value the peace of mind TIC provides. See our dedicated Tax Investigation Cover page for more information and to subscribe online.
Can Lovewell Blake handle the international aspects of my affairs?
Lovewell Blake is a member of HLB International. HLB International is a global network of independent advisory and accounting firms, comprising member firms in 158 countries. HLB International member firms offer audit, accounting, tax and business advisory services. HLB International is a leading mid-tier accounting network. Through our HLB sister firms, we have access to vast expertise all over the world and regularly work with these firms to provide a joined up, international strategy to many of our clients.
Can you help with corporate tax work as well as audit?
Our corporate tax team have vast experience is advising our clients through a plethora of tax challenges including:
- Company and group reorganisations including acquisitions and tax groups
- Property transfers, disposals and acquisitions
- R&D claims under both the SME scheme and the Expenditure Credit scheme
- International aspects such as expanding overseas or coming to the UK
Our corporate tax team is headed up by specialist tax partners with all the advisory work entirely independent of any audit work we also undertake.