Posts Tagged ‘Expert accountancy research and development’

Reap the Rewards with R&D Tax Credits

Wednesday, November 15th, 2017

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