Research & Development has a very broad definition by all standards. R&D is the process of taking an idea and transforming it into a fully-fledged product or process. Researching, designing, creating, and testing are all part of the R&D process.
R&D Tax Credits are a Government incentive introduced in 2000, designed to encourage innovation and increasing spending on R&D activities across multiple sectors. Specifically, for businesses operating within the UK. This is an incentive giving you the opportunity to reduce your corporation tax bill or receive a refund from HMRC based upon the number of working hours your business dedicates to Research & Development.
Under this scheme, SMEs can claim back up to 33% of the costs associated with R&D. That’s 33p back for every £1 spent on qualifying R&D activities. The scope for identifying R&D is so widespread that you can claim R&D in virtually every sector within the UK market.
R&D helps businesses diversify from their competitors by creating different products/services that are not the same elsewhere. This creates unique opportunities for them to obtain a higher market share from the increased revenue. As well as this, they improve business’ productivity where efficiency can be optimised, and wastage (of different sorts) is reduced through R&D. As you can see, there are more ways than one with how R&D can improve businesses.
R&D is important for businesses because it provides powerful knowledge and insights, leads to improvements to existing processes where efficiency can be increased and costs reduced. It also allows businesses to develop new products and services to allow it to survive and thrive in competitive markets.
The time limit for claiming R&D tax credits is two years from the end of your company’s accounting period. To claim for all your qualifying expenditure on your project, you should submit an R&D tax credit claim before this period of time ends. If this is your first claim, this is important because you could miss an entire year’s worth of R&D activity.
Research & Development has a very broad definition by all standards. R&D is the process of taking an idea and transforming it into a fully-fledged product or process. Researching, designing, creating, and testing are all part of the R&D process.
Once you’ve contacted us, our R&D consultant will call you to further understand your R&D activities.
Here is where our R&D specialists will draft up an analytical report on your R&D, ready to submit to HMRC.
This is the final step where we submit the claim and wait for any potential enquiries made by HMRC.
In our experience claims have had compliance checks taken up.