R&D tax credits are a tax incentive administered by HMRC and designed to encourage UK companies to invest in research and development projects. The tax credits can enable a company to reduce its tax bill or claim cash credits as a proportion of its R&D expenditure over the qualifying period. You can make a claim each year
There are two types of R&D tax credits: one for small and medium-sized enterprises (SMEs) and one for large companies or SMEs that cannot claim the SME scheme. The SME scheme offers a 230% super-deduction on qualifying costs, while the large company scheme offers a 13% expenditure credit on qualifying costs
To be eligible for R&D tax credits, your project must meet the standard definition of R&D, which involves making an advance in science or technology, overcoming scientific or technological uncertainty, and being not easily worked out by a professional in the field. Your project must also relate to your company’s trade or a trade that you intend to start up based on the results of the R&D
Copyright Red Owl IT