What Are Research & Development Tax Credits?

Research and Development (R&D) tax credits are a government incentive designed to reward UK companies for investing in innovation. Research & Development tax credits are a valuable source of income for many companies that wish to develop their business. R&D tax credits can also be used as an investment into further research and development for your company.

According to HMRC, “Research and development takes place when a project seeks to achieve an advance in science or technology through the resolution of scientific or technological uncertainty.”

Companies that invest money into developing new products, services and processes or enhancing existing ones, are eligible for benefits such as a cash payment, reduction of corporation tax or increase in taxable losses.

Would you like to know if your business qualifies?

Find out if you qualify for R&D tax credits with the eligibility checker.

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Who can claim Research & Development
tax credits?

Companies that spend money developing new products, processes, and services or enhancing existing ones, are eligible for Research & Development tax relief. If you’re spending money on business innovation, you can make a Research & Development tax credit claim through Plan it Tax.

Even if the development project is unsuccessful or shelved following the period of Research & Development, you can still make a claim on the time and other costs you incurred working on these projects, so give it a go and claim back on the money you have lost.

If you are still unsure if your business is eligible to claim Research & Development tax credits, contact us today for a no-obligation consultation with one of our knowledgeable and friendly advisers. Or use our quick R&D eligibility checker.

What is the process to claim R&D tax credits?

Once it’s clear that you are eligible to make a Research & Development tax credits claim through Plan it Tax, we will prepare all of the information required by HMRC on your behalf to make sure all the hard work is done for you.

Our Research & Development tax specialists will claim for your two most recently completed financial years. For example, if your financial year end is the 31st December 2021, you can claim back Research & Development tax credits for the years ending 31st December 2019 and 31st December 2020.

How are R&D tax credits calculated?

Research & Development tax credits are calculated based on your business’s qualifying research and development expenditure. Qualifying expenditure is identified and enhanced through the relevant rate to produce your enhanced expenditure. This will give your company a cash credit if you were loss-making, a corporation tax reduction if you were profitable, or an amount based on a combination of the two.

Research & Development tax credits benefit companies exponentially. The SME scheme has a rate of R&D expenditure tax relief of 230%, with the large company scheme at a rate of 130%. Through these schemes, you can improve your company’s financial strength, save money on your tax bill or reinvest into innovative projects in the future, for an even larger tax claim next year.

For a free, no-obligation consultation, please call us on 0161 757 3657 or email at info@planittax.co.uk

Or use R&D eligibility checker.