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Introducing R&D Tax

The R&D Tax Scheme can be transformational for companies of any size, enabling them to reclaim as much as one third of their R&D spend through the company tax return.

This can unlock hidden value in your business which makes a professional assessment invaluable. Not seeking advice on R&D Tax from a specialist can mean a missed, or reduced opportunity. Your competitors may already be claiming. So, it simply makes sense to get the best advice available.

What is R&D Tax Relief?

R&D Tax Relief is available to UK companies subject to corporation tax, using science or technology as part of an innovative process or product. The technology must be innovative; being commercially innovative is not enough.

There are two variants of the scheme – large company (RDEC) and small company. Small companies that have received subsidies or grant funding may need to use the large company scheme.

The small company scheme is much more beneficial – paying the company upwards of 19% (typically 24.75%, maximum 33.35% depending on taxable profit/loss) of qualifying R&D costs. The large company scheme typically benefits by just under 10% of R&D cost.

What qualifies?

The key activity is resolving the scientific or technological uncertainties, this might be in a number of ways for example iterative development, prototyping, proofs of concept, or experimentation and testing. You can claim some costs that relate to these activities, but crucially not everything. You can also claim staff costs for some indirect supporting activities like project management, HR, and finance in support of R&D activities. The boundary of the R&D costs you can claim are those that relate to resolving the scientific or technological uncertainties you face. These differ in nature from the commercial project and the entire development project which might include routine work and elements not related to R&D.

Often, companies are not aware of the R&D schemes, but increasingly businesses are claiming and if you are not, then your competitors might be. Hence, it is crucial to consider your eligibility, or you may be at a competitive disadvantage. This is where we can help.

Our R&D Tax specialist partner offers free assessments to anyone, but if you think the answer to some of the questions below is “yes”, you have absolutely nothing to lose and potentially a lot to gain by talking to us.

  • Do you develop innovative new products, processes or services?
  • Do your activities involve science or technology?
  • Do you employ or subcontract technical staff like engineers, developers or scientists?
  • Do you take on challenging projects that may even fail?
  • Are you engaged in complex technical problem solving where the correct approach is not well known?

Contact us today to see if you may be eligible!

I am a solicitor based in South Shields and I regularly refer my clients to Andrew Potts of KP Simpson for all of their accountancy needs. I can do this with complete confidence because I know that they will be given the best advice and that their best interests will be looked after by a friendly, honest, and professional team. I have had excellent feedback from my clients who have used KP Simpson’s services and I would have no hesitation in recommending them to others.

Gavin Teasdale
PGS Law

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