R&D Tax Credits Explained

Did you know that in the period 2017 - 2018, the total number of Research and Development (R&D) Tax Credit Relief claims was 48,635.

In 2016-2017 the total number of claims for R&D tax credits rose to 52,335. This is an increase of of 20% from the previous year. The the surge in claims was driven mainly by small and medium-sized enterprises, which totalled 45,045 in 2016-2017 - an increase of 22% from 2015-2016.

Over £5 billion was claimed in total. However, there are still thousands of companies that aren’t pursuing the money they are entitled to. We specilise in working with manufacturing, engineering and software developement companies.

What exactly is R&D Tax?

Introduced in 2000, R&D tax credits are the Government's way of encouraging exciting new products and services. Why? Because by helping to reduce some of the financial risk for technology companies, the Government hopes they'll find new and innovative techniques to make the UK more competitive internationally.

How do R&D tax credits work?

If your business is investing money in developing new products or services, and on improving processes, you’re likely to be eligible for R&D tax relief.

Through your R&D tax credit claim, your company can receive either a cash payment and/or Corporation Tax reduction.

The scope for identifying such company innovation and investment is wide, capturing every single business sector. Plus, if you’re making a claim for the first time, you can typically claim R&D tax relief for your last two completed accounting periods.

What costs qualify for R&D tax credits?

Any spending on day-to-day operational costs is eligible. However, capital expenditure, such as investments on fixed assets (land and buildings) is not covered by the R&D incentive.  

The following costs can be included in your claim: 

  • Staffing costs
  • Subcontractors
  • Consumables
  • Software
  • Payments to the subjects of clinical trials

Also, larger enterprises can include contributions to individuals or certain research organisations where qualifying R&D work was carried out.

What are the benefits?

Well, what can you do with the extra cash you’ve saved? Here are some ideas:

  • Keep investing and growing your business
  • Gain a competitive advantage over competitors that haven’t yet made a claim
  • Help grow your sector, promote economic growth and more employment opportunities
  • Compete on a global scale. The more companies that claim, the better the outcome is for the UK economy

How much it costs to claim R&D tax credits

In the unusual event of an unsuccessful claim, we don’t take any payment, so there’s no risk for you. You only pay us after you’ve received your R&D credit or Corporation Tax reduction.

There are no hidden costs – the fee you pay us is a one-off and it will be communicated to you by one of our specialists.

1. Assessment

We’ll set up an initial call to find out more about you and talk about our tax claim process. Our team can work with whatever systems and records you have in place.

Our specialists are proactive and do all the heavy-lifting so that you don’t have to. We can also deal with your accountant directly to obtain your accounts and payroll information.

2. Analysis

We then go away and identify all potential R&D tax credits and find out what’s available to you.

We’ll leave no stone unturned and figure out every relevant qualifying cost. Our specialists will determine the full extent of your R&D claim.

3. Proposal

Our specialists will create a detailed report of what you can claim. We'll look at your research, and see how what your business compares to the R&D tax credit requirements.

Each claim is unique, so no two reports are the same.

4. Submission

We’ll deal directly with HMRC so you don’t have to worry about the submission of the Corporation Tax Return (CT600), which includes your R&D tax credit calculation.

Our specialists will follow up with HMRC to check for any updates on your claim. If any problems arise, we’ll happily deal with those too.

Get the credit you deserve and fuel your growth

R&D tax incentives have the power to transform your business. Speak to a specialist today.


0800 2808982