Your company could be eligible to claim Research and Development (R&D) Tax Relief, sometimes referred to as R&D Tax Credits. These tax credits are available from HMRC and help small businesses to get money back for their project work.
Companies may be entitled to receive cash credits for projects they were involved with up to two years previously. To claim R&D Tax Relief your business should be undertaking research and development for new products or services. Even loss making companies can make a claim, and the Tax Relief may enable your company to generate tax credit payments. If your business makes a loss on qualifying R&D expenditure, you could either ‘surrender’ or ‘cash-in’ any losses associated with an HMRC claim.
Chris Wallace, Managing Director, Visionary Accountants, St Albans, Hertfordshire, said:
‘Most companies assume that you must be involved in a scientific related industry to be eligible to claim R&D Tax Relief, but this isn’t always the case. Your business can be involved in any industry, but it is the type of projects that your company is involved with that affects whether you can claim R&D tax relief. The guidelines state that to claim R&D tax relief your company must be “solving technical uncertainties,” within science and technology.’
Chris Wallace, Managing Director, Visionary Accountants, St Albans, continued:
‘There are a number of different costs your business can claim R&D tax credits for. If it is a broad claim you may be eligible to receive significant financial support. If your colleagues work on R&D projects you may be able to claim back salary costs, employers National Insurance Contributions (NICs) and company pension contributions. Companies can claim back up to 65% of the value of their agency workers, freelancers and sub-contractors invoices when these workers are involved in R&D projects. If you are using materials in your R&D that are later consumed and are unable to be reused you can make a claim. You are also eligible to claim back the cost of any software used in your R&D work.’