R&D Tax Credits – driving forward innovation across the UK

What are they?

R&D tax credits are a tax incentive introduced by the UK Government in 2000 as a way of encouraging greater research and development spending by companies. In recent years, the rates have increased significantly, to further incentivise companies to claim and they are available to all companies, regardless of size.

However, research shows that many companies that are eligible to claim for R&D are still unaware that they qualify or believe the process to be difficult.

We work closely with leading experts to make more businesses aware of R&D tax credits and to help banish the myth that some people may have, of them only being for companies with R&D departments or ‘men in white coats’.

In actual fact R&D tax credits can be claimed across a wide variety of different sectors. Any company that spends money trying to improve a product or service through technology, either by using qualified staff or appropriate project controls etc is likely to be eligible to claim.

Recent statistics show the estimated number of R&D tax credit claims according to the latest stats from HMRC to be 85,900 with the average SME claim value being £57,265. But there are thousands more companies still yet to claim – could yours be one of them?

Are you eligible to claim?

To help you identify whether your company could be claiming R&D tax credits, you can use the short series of questions listed here (R&D Questionnaire). If you answer ‘yes’ (or even ‘unsure’) to one or more of these questions, the chances are that you could be eligible to qualify.

How can your company benefit?

The effect of an R&D claim is to reduce taxable profits / increase taxable losses. The claim can: reduce profits, reduce profits and create a loss, or increase pre-existing losses.

SMEs can deduct an extra 86% of their qualifying R&D costs from their yearly profit, as well as the normal 100% deduction, to make a total 186% deduction. If the SME is loss making, the company can claim a tax credit worth up to 10% of the surrenderable loss.

If you would like to speak to us in more detail about how we can help you claim R&D tax credits, please contact Jacob Mercer  direct on 0113 457 5397 or email at Jacob.mercer@kirknewsholme.co.uk