Tax relief for research and development is a government incentive introduced to encourage companies to invest in R&D, but many potential tax breaks are missed because businesses don’t realise they are eligible.

By making sure you use your full tax entitlement, we can help save you time and money, both now and in the future.

With the level of R&D relief being so beneficial, it’s not surprising that HMRC has increased its level of scrutiny. Our specialist team will work closely with you to submit a claim compliant with HMRC requirements, thereby reducing the potential for any challenge.

Our R&D services

Our R&D services are structured as follows:

  1. Eligibility for the relief assessment, including:
    • Advice on whether your company meets the criteria for the SME or large company relief
    • Review of the activities of your company and full liaison with your technical personnel to ensure a claim can be made
    • Review of grants received in respect of R&D activities which may affect the company’s ability to claim
  2. The submission of a substantiated claim to HMRC, including:
    • Production of the technical documentation to ensure it contains all the support necessary to show the science and technological uncertainties in the field and your subsequent advancement
    • Identification of all areas of eligible R&D activities conducted by the company
    • Cost analysis to ensure that only qualifying costs are included in the claim and any necessary adjustments have been made
  3. The introduction of systems to capture the relevant information to facilitate the production of future claims, including:
    • A review of the current systems in place in the relevant areas
    • Identification of the eligible processes and establishment of a mechanism to collate the data required
    • Advice on the implementation of any new system suitable to expedite claims

Identifying a claim

The starting point is that a company must have a project that seeks to achieve an advance in overall knowledge or capability in a field of science or technology. Any activities that directly contribute to achieving this advance through the resolution of scientific or technological uncertainty are R&D.

Often misunderstood by companies is the fact that the project does not have to have been a success. Advancement can be classed as simply knowing that there is one more thing that does not work.

Qualifying costs

  • Revenue costs e.g. employee costs, utilities, materials, payments to trial volunteers, third party staff in some circumstances
  • In addition, certain capital expenditure e.g. buildings, such as laboratories, and assets employed in the R&D activity can qualify for research and development allowances, giving a 100% allowance

Scope of the relief

For SMEs

  • 225% for expenditure from 1 April 2012
  • 230% for expenditure from 1 April 2015
  • For Large Companies

  • 130% for expenditure until 31 March 2016
  • For both SMEs and large companies

  • Above the line credit of 10% for expenditure incurred after 1 April 2013
  • Above the line credit of 11% for expenditure incurred after 1 April 2015
  • Making your claim

    If you have relevant R&D expenditure we can make a current year claim.  It may also be possible to amend the prior year’s corporation tax return to include a claim.

    Who to contact...

    David Hibbert
    Director – Corporate Tax

    David joined Smailes Goldie in March 2016. He has many years’ experience in practice in Big 4 and Top 10 firms and a couple of not so large firms. He also has experience in industry.

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