Research & Development (R&D) Tax Relief
Research & Development (R&D) tax reliefs were introduced to incentivise companies innovating to achieve an appreciable improvement to science or technology through the tax system. Claims are often overlooked because business owners overestimate the level of innovation required to claim.
The Benefits of Claiming
- Eligible companies obtain extra tax relief on qualifying expenditure. This extra relief either reduces taxable profits or creates or increases tax losses. Such losses can usually be sacrificed to HMRC in return for a cash repayment from HMRC.
- The level of relief is very generous. A SME incurring £100k of qualifying costs on wages and materials could save £26k in tax. How long would it take to generate the sales to produce £26k of profits?
- Eligible companies can make a claim going back two financial years, so claiming for two previous years can be particularly beneficial for first time claimants.
- Research and Development Allowances (RDAs) are available at a rate of 100% on capital expenditure used for research and development purposes. This gives full tax relief in year one on expenditure when relief may otherwise be obtained at a rate of 18% per annum.
Is Your Company Eligible to Claim?
R&D tax reliefs can only be claimed by
- Qualifying companies (most companies are eligible)
- Incurring qualifying expenditure
- On qualifying R&D projects
How We Can Help You
If you think your company might be eligible to make a claim, Sheffield Chamber has partnered with Radius at Shorts Chartered Accountants, and here’s the process that we use…
1 Initial Discussion
30-60 minutes, either in person or over the phone to explore whether a claim is possible.
2 Technical meeting
Radius will work with you to identify qualifying projects and costs to include in the claim.
3 Produce Claim Documents
Radius will work with you to maximise the claim within the scope of legislation. They will produce the technical report and a summary of qualifying costs that is required to support a claim.
You review it and when you are happy, they will submit the whole claim to HMRC for you. You will then receive your tax savings from HMRC – around a quarter of the amount you’ve actually spent on innovating.
For more information call 0114 201 8888 or email firstname.lastname@example.org
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