Research and Development

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

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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.

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.

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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.