R&D tax credits: It pays to be different

With HMRC calculating that the average claim is worth £57,724, R&D tax relief is a potentially lucrative cash injection for your business.

The relief is a reward for companies investing in R&D activities by providing an opportunity to claim a reduction in corporation tax or, for loss-making companies, a payable tax credit.

Currently, companies receive an additional 130 per cent tax relief on qualifying expenditure.

In simple terms, and depending on the tax position of the claimant company, this means that R&D tax relief is worth between 25 per cent and 33 per cent of qualifying expenditure.

HMRC’s definition of R&D is purposefully broad.

Whatever size or sector, if a company is taking a risk by attempting to “resolve scientific or technological uncertainties” then it may be carrying out qualifying activity.

This could include:

• Creating new products, processes or services
• Changing or modifying an existing product, process or service

If you’re not sure whether your project is scientifically or technologically possible, or you don’t know how to achieve it in practice, your work may qualify for R&D tax credits.

If you are trying to improve existing or create new products, services, or processes and you are breaking technical ground in doing so, there is a good chance you are undertaking qualifying R&D.

Click here for the guidelines that HMRC itself works to.

In the last few years alone Brown & Co has made successful R&D claims totalling £437,105. Get in touch with us to see if your business could be eligible.