How to keep your R&D tax credit claims on track in 2024

By RfM Transform

15 Mar 2024

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With the recent changes to R&D tax credit claims from HMRC, it's crucial for those businesses engaging in research and development to stay ahead of the curve. The UK government's increased scrutiny means we must take a more systematic approach to ensure your business maximises its entitlement while maintaining compliance.

Here are three key strategies to help your R&D claim in 2024, drawing from the expertise of Zach and the R&D team.

1. Meticulous Documentation

The foundation of a robust R&D tax credit claim is thorough documentation. This means keeping detailed records of your development processes, experiments, and iterations. Documenting your R&D activities serves a dual purpose: it helps you keep track of your progress and serves as concrete evidence for HMRC that genuine R&D has occurred.

Ensure that you:

  • Log all experimental development, including development that fails. This demonstrates a clear difficulty in achieving your R&D goals and the challenges that you faced during your project.
  • Keep detailed project notes. These should outline the objectives, challenges, and outcomes of each R&D project.
  • Save all relevant communications related to your R&D projects. This can include emails, meeting notes, and progress reports.

2. Mapping Out Your Vision

R&D is inherently exploratory, often leading businesses down unanticipated paths. However, having a clear roadmap can not only streamline your R&D efforts but also strengthen your tax credit claim. By outlining your project's goals, anticipated challenges, and methodologies, at the time you will demonstrate to HMRC that your activities are structured and goal-oriented - key indicators of qualifying R&D!

Consider:

  • Defining clear objectives for each R&D project.
  • Outlining potential research pathways and alternatives.
  • Establishing benchmarks for progress and success.
  • Establish the limits of what can be done currently with available market solutions
  • Work out what will be different across the industry as a result of your work

This structured approach does not limit the scope of your R&D; instead, it provides a framework within which innovation can thrive!

3. Tracking Costs with Precision

A critical component of your R&D claim is the accurate and comprehensive tracking of all associated costs. This includes direct expenses like materials and software and indirect costs such as staff time and overheads allocated to R&D activities. To enhance the credibility of your claim:

  • Implement a cost-tracking system dedicated to R&D activities.
  • Record all expenses in real-time to avoid omissions or errors.
  • Categorise costs according to HMRC's guidelines to ensure that all eligible expenses are claimed.

By meticulously tracking your R&D expenditures, you not only substantiate your claim but also gain insights into the cost efficiency of your R&D operations.

At RfM Transform, we understand the complexities and opportunities for small businesses with their R&D claims. Our dedicated team is here to guide your business through the intricacies of making a compelling R&D tax credit claim.

With the strategies above in place, your business is well-positioned to navigate the evolving demands of R&D tax credit claims in 2024, ensuring that your innovative efforts are recognised and rewarded.

Want to maximise your R&D Tax Credit claims? At RfM, we specialise in guiding our clients through the complexities of R&D tax relief. Our team is dedicated to helping you unlock the full potential of your innovative projects, ensuring you benefit from every available incentive. Get in touch to discover how we support your business's growth and innovation. 

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