R&D Tax Relief

As part of our service, we can help you reclaim as much as 33% of your development costs under the Government's Research and Development tax relief scheme which is intended to incentivise companies to undertake R&D activities and promote innovation.

What costs qualify for R&D tax relief?

The bulk of R&D claims will be comprised of the development costs. There are essentially 2 types of spend

  • Qualifying direct spend – a company hired onto the project
  • Qualifying indirect spend - the time of inhouse staff spent managing the project

As part of our development process we will set up in advance the schematic for recording R&D expenditure. We will also state in the contract that the Intellectual Property is accruing to your company.

How much can be recovered?

The calculation can be a little complex, but as a rule of thumb, for a loss-making business, your company can reclaim 33% of costs that relate to an R&D project. If the company is profit making, then another 130% of your R&D spend can be deducted from your trading profits to save on corporation tax.

For example for £100k of R&D spend:

  • For loss making businesses, the tax credit is approx. 33% of total R&D spend - £33,000
  • If profit making businesses, tax credit is approx. 26% of total R&D spend - £26,000

What are the criteria for a claim?

The project must relate to your company’s trade - either an existing one, or one that you intend to start up based on the results of the R&D and meet the following criteria:

  • Are you taking the financial risk in your development programs?
  • Does what you are developing involve technology or science?

* Technology can be technical equipment, software, production processes, tooling developments, web based improved business processes; in fact anything that is based on conventional technologies.

How is the money reclaimed?

We work with R&D Tax Credit specialists to submit your claim to HRMC and provide all the necessary information, including the narrative – a document which details the following:

  • Project background - general overview of the project
  • Why it’s important to the business – how does it enhance your unique selling point / competitive advantage?
  • Key staff profiles associated with the project
  • Tell the story about it not existing elsewhere and no 3rd party solutions available to the best of your knowledge.
  • Whether it was achieved, failed or continues into the next financial year

Find our more

Want to find out more? Get in touch or chat online to discuss your project and whether is it eligible for tax relief.