Research and Development, or as it’s more commonly known, R&D tax credits, are a government incentive which is designed to compensate UK companies for investing in development and innovation. R&D tax credits are a very valuable source of income for a lot of companies that wish to develop and grow their business.
Over the last few years it has become apparent to us that there is a widespread misunderstanding about what qualifies for relief. In our experience, clients think that they need a laboratory, test tubes and staff in white coats to be able to make a claim! In the first instance, clients should be asking themselves whether they produce anything innovative and unique.
HMRC state, “Research and development take place when a project seeks to achieve an advance in science or technology through the resolution of scientific or technological uncertainty.”
A number of companies invest money into developing new products, services and processes or improve the ones they currently have and these are eligible for benefits such as a cash payment, reduction of corporation tax or increase in taxable losses.
If you are a business that creates innovative products or processes, you could qualify for Research & Development tax relief.
Many people have heard the term but don’t really understand what this is and more importantly whether what they are doing would come within the regime and be eligible. R&D tax relief is designed to assist innovative companies who develop new software and products etc by either reducing their corporation tax bill or providing a repayable tax credit for companies who are not yet making profit.
The great news is, we will do all the hard work for you, by preparing the relevant information for HMRC.
Money Spheres R&D tax specialists will claim for your two most recently-completed financial years. So if your financial year end is the end of Dec 2019, you can claim back R&D tax relief for the years ending 31st Dec 2017 and 31st Dec 2018.
It really is as simple as that.