Research and Development (R&D) tax credits are met with a great deal of confusion by business owners throughout the UK. Quite often, the innovative businesses we speak to are unaware of R&D tax credits or don’t think they fall under the R&D eligibility scope.
We work hard to raise awareness of the Research and Development (R&D) tax initiative. More than 95% of the businesses in the U.K that are eligible, don’t claim. For this reason, we have created a simple checklist to help companies identify if they qualify.
1. Does your company file corporation tax return?
All limited companies that are subject to UK corporation tax are potentially eligible for the governments Research & Development tax credit initiative. Additionally, costs sustained within your past two accounting year-ends can be included, as your first claim. As long as you are an SME and are subject to corporation tax then you will be eligible as long as you are innovating and developing towards the growth of your company or society.
2. Which are the qualifying activities?
It is common for businesses not to be aware that their work or products are classed as Research & Development. The government’s definition of R&D is intentionally extensive, covering a vast scope.
Your work is classified as R&D if your activity resolves a scientific or technological uncertainty. Even if that definition applies to specific industries, it can be used for other sectors solving outstanding issues. This may include anything from writing bespoke software to experimenting with new flavours. If you are wondering if your project or activities qualify, you can contact us for more information.
3. Have you invested capital in R&D?
The common misconception within businesses is that they haven’t invested in Research & Development or any innovative activity enough to be eligible for the tax rebate. However, that might not always be the case. If your business has participated in the qualifying activity, then it is possible to claim back expenditure through a cash sum or tax rebate. whichever it may be, both help towards business growth. And furthermore Shencoh is here to help clients get the maximum claimable sum they can.
4. Who are your competent professionals?
HMRC requires evidence to determine that you have achieved a considerable improvement in the work the business is undertaking. There will need to be at least one identified ‘competent professional’ who can describe the advances made. This information will help Shencoh identify any and all research and development processes, we here at Shencoh, sue to our team of specialists, have had a 100% success rate when it comes to research and development tax claims.
5. Under which scheme do you fall?
There are two primary schemes/plans that take into consideration the size of your company. The first scheme is tailored for SMEs. These are companies with fewer than 500 staff and with a turnover of no more than £80 million. The larger companies fall under the second scheme, having the ability to claim the Research & Development Expenditure Credit (RDEC). The RDEC scheme has a larger average claim but the tax claimable percentage is lower at 12% not 33%.
The criteria mentioned above are a few of the essential requirements that need to be met in order to be eligible for R&D tax credits. If you would like a professional free consultation on your eligibility, do not hesitate to contact us today. or check out the Shencoh eligibility checker to quickly see if you qualify for R&D tax credits, going on the checker will speed up the claim process and allow Shencoh and yourself if you are qualifying for R&D.
How can we help you?
As mentioned above, please do take the R&D Eligibility Quiz to find out if you have qualifying R&D expenditure, it help us both to better help you and your claim.
Shencoh is an R&D tax specialist company, with methodology and practices recognised by HMRC. We pride ourselves on taking no more than 3 hours of your time from start to completion of you full claim, on a no win no fee basis. If you are interested in learning more or need help putting a claim in, please fill in the contact form here or give us a call on 0161 757 3657.