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Introduced to encourage and reward innovation, R&D tax credits are one of the most attractive tax reliefs available, often resulting in significant cash repayments from HMRC.
What’s even better news is that a lot more activities are eligible for the scheme than you might think.
How do I know what I can and can’t claim under the scheme?
In a nutshell, you must be able to demonstrate to HMRC that your product or service is truly innovative and, at a technological level, an advance on what’s currently available in the market.
According to HMRC, R&D for tax purposes is a project (or a component of a larger project), which “seeks to achieve an advance in science or technology [through] the resolution of scientific or technological uncertainty”. Encouragingly, R&D is still deemed to have taken place whether or not the project is actually successful; it’s the “seeking” that counts.
If your project meets these conditions, congratulations! You can claim R&D tax relief on its day-to-day costs and expenditure, including things like staff, subcontractors, materials, software and utilities.
And don’t be put off if your R&D doesn’t involve new technology; HMRC’s definition extends to substantially improving existing products and services as well, and includes the construction of prototypes.
Give me some examples
Here are just a few examples of what can be claimed for:
How could my business benefit?
It’s hard to be specific without knowing the industry sector you’re working in. That’s why it’s always wise to seek professional advice before undertaking a claim.
Get it wrong and you could end up either:
With support from the right specialist advisers, you’ll be able to:
We’ve already successfully secured in excess of £1.32M of R&D tax-savings for our clients but would like to increase this total!