Reap the Rewards with R&D Tax Credits

Background

Since 2000, any businesses which spend money on the research and development of new products, processes and services have been rewarded for their efforts with R&D Tax Credits from HMRC.  But many SME’s are not claiming these R&D Tax Credits because they simply don’t know where to begin.

At Tree Accountancy, we want to help you and your business grow.

We have expert R&D accountancy experience and specialist R&D advisors in place to help you make the most of R&D tax relief.  R&D work is time-consuming and expensive.  But get it right, and the rewards can be vast.

Amount of relief

Most SME’s should fall within the small company R&D scheme. This, for example, provides an additional 130% tax relief for qualifying expenditure. So, for each £100 of R&D spend the company’s profits will be reduced by a further £130, a £230 deduction in total.

If an R&D loss is converted into a tax credit, a refund of 14.5% of the loss is available, so for example, a loss of £100 creates a £14.50 tax credit refund.  This can soon mount up.

What R&D costs can I claim for?

To qualify, your business must be carrying out a project which seeks advances in science or technology.  The qualifying categories of expenditure include:

– Staff expenditure (including gross salary, employers NIC and pension contributions)

– Sub-contractor R&D costs (generally 65% of the cost can be claimed)

– Consumable items (power, fuel, water etc) used directly in R&D work

– Computer software employed directly in R&D

And did you know that you can also include R&D work undertaken on behalf of your clients, too?

Lastly, if your business does not qualify for the small company R&D scheme, it may still qualify under the larger scheme.

To be connected to the right Tree R&D accountancy expert, please contact Kate@treeaccountancy.co.uk

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