>Let me enlighten you about HMRCs R&D tax credits. Because if your company qualifies you may find your self in the enviable position of having the taxman give you money. Actually the most likely scenario is giving you some of the money he has already taken, back. Any way, better in your pocket as they say.
The first qualification is you must pay corporation tax. Next you should be an SME with fewer than 250 employees, and have an annual turnover less than €50M. And also have a minimum expenditure of £10,000 on R&D in the accounting period. This is a bit tricky to access at first, especially if you haven’t made a claim before but you can include staff salaries, material, power, water, and fuel. Anyway those are the broad qualifications.
The next thing to do is ensure is that you are in fact doing R&D.
You should be “Developing scientific or technological knowledge that isn’t commonly available e.g. creating or appreciably improving a product, process or service”. Be careful here just being innovative in a general commercial sense isn’t enough.
You also need to be able to show that “Scientific or technological challenges have been overcome as part of the work” The HMRC view is that if a solution is obvious to a competent professional then it is not R&D.
Also simply buying new technology and using it isn’t R&D, however adapting it or developing it for your own purposes might be, if it involves scientific or technological advances.
And finally what is it worth? Well, consider it this way:
The tax relief on allowable R&D costs incurred after 1 August 2008 is 175 per cent – that is, for each £100 of qualifying costs, your company or organisation could have its Corporation Tax bill reduced by an additional £75 on top of the £100 spent.
This is a potted version of R&D tax credits. But it’s certainly an area for SMEs to explore in these uncertain times. If you would like to know more, and discuss if and how you qualify.
Then contact: Shaun Brailsford at SGBA
