R&D tax relief

19796 MACO FINANCIAL ACUITY NEWSLETTER WEB FILES 04

R&D Tax Relief is a UK Government initiative designed to reward UK companies for investing in innovation.

Many companies often think that the R&D Tax Relief Scheme will not apply in their situation or they are sceptical about the potential benefits available to them and view the application process to HMRC as not worth the effort.

The reality is often very different.

Working with our R&D specialists, we have a proven track record of successfully obtaining R&D Tax Relief for companies from a wide range of industries.

 

What are R&D Tax Credits?

If you have incurred costs developing new products, processes or services then you may be able to make a claim.

HMRC require a number of criteria to be satisfied for your claim to be successful. The two main criteria being: uncertainty and advancement.

If your R&D spend on a project which had a technical uncertainty achieved a technical advance in overall knowledge, or capability in a field of science or technology, then it’s likely that you’ll have a strong case for making a claim.

 

Is my company eligible?icon looking closer

Any UK incorporated company and liable to pay Corporation Tax that invests in R&D is able to apply.

The R&D spend could involve e.g. in-house or outsourced labour, modelling, testing, prototyping, developing processes and systems to support the innovation and expenditure on consumables essential to the R&D.

 

What can you claim?19942 MACO Tax Planning 31

Employee costs: the salary costs for those employees within the company who are carrying out the R&D.

Agencies/sub-contractors: costs for paying an agency or the like for staff provided to your company who are directly involved in conducting the R&D.

Materials: consumables and/or transformable materials used during the R&D process.

Utilities/software: the cost of the power, water, fuels, software used directly in the R&D.

 

Sub-contracted R&D expenditure: if you are claiming under the SME scheme then you may be able to claim back 65% of what you spend on certain R&D activities carried out for you by the sub-contractor. If you are a large company or organisation you can only claim expenditure on certain activities by specific kinds of sub-contractor. 

There are a number of conditions to be satisfied in each cost category - SMEs and large companies/organisations - which we will discuss with during the initial consultation.

 

How to claim?19796 MACO FINANCIAL ACUITY NEWSLETTER WEB FILES 12

To claim R&D Tax Credits you’ll need to complete a CT600 form and submit it to HMRC. The calculation of your claim will depend on the nature of the R&D you have undertaken.

Part of the claim process is writing a convincing technical commentary about the R&D project with clear financial calculations.

We will assist you with the whole claim process – completing the CT600 and compiling the commentary to accompany the R&D financial information.

Before going through the application process, we will provide you with an initial indication as to the likelihood of making a successful claim and, if successful, how much you could receive.

 

How much could you receive?

Up to £26 for every £100 of R&D spend can be claimed and received as a reduction in your Corporation Tax bill.

Loss making companies can receive £33.35 cash back for every £100 invested in R&D. Large companies can typically claim around 10% of R&D costs back. The average pay out in the UK is just under £50,000.

 

Getting started19796 MACO FINANCIAL ACUITY NEWSLETTER WEB FILES 23

Give us a call to arrange a consultation by phone. During this initial 10-15 min call we will:

(1) Give you an indication as to the potential of the claim.

(2) Provide you with an overview of the application process, the key actions and time involved – we will support you through the whole process.

(3) Provide you with a fixed fee quote for assisting you with the application and negotiating with HMRC on your behalf.

To arrange an initial consultation get in touch with Tricia Halliday, Tax Director in the first instance - 0141-272-0000 or email This email address is being protected from spambots. You need JavaScript enabled to view it.