How do R&D Tax Credits work?
Companies that spend money developing new products, processes or services; or enhancing existing ones, are eligible for R&D tax relief. If you’re spending money on your innovation, you can make an R&D tax credit claim to receive either a cash payment and/or Corporation Tax reduction. If you’re making a claim for the first time, you can typically claim R&D tax relief for your last two completed accounting periods.
R&D Tax incentives eligibility and qualification
You must be a limited company in the UK that is subject to Corporation Tax, and have carried out qualifying research and development activities, spending money on these projects. Whatever size or sector, if your company is taking a risk by attempting to ‘resolve scientific or technological uncertainties’ then you may be carrying out qualifying activity. This could include:
What qualifies as R&D expenditure?
Staff Costs
External Workers
Subcontracted R&D
R&D Consumables
Software
Clinical Volunteers
Research Contributions
Prototypes Costs
"R&D Tax Credits were introduced almost 19 years ago, yet according to recent statistics, less than 10% of SME’s with a legitimate claim have actually applied, its almost criminal"
— R Gerard, R&D Tax Specialist
