Research and Development Tax Credits

Are you missing out on the generous reliefs that reward innovation?

Companies can benefit from up to 33% cash back by making a successful Research and Development (R&D) tax relief claim. R&D tax credits are still an underclaimed relief. This is due to advisors and companies misunderstanding what can be included within a claim and what activities and costs qualify for the relief. It is often wrongly assumed that because companies do not operate in the technology or scientific sector they cannot make a claim.

The truth is that the relief can benefit companies in all industries and at all stages within their life cycles. For instance, it could help cashflow for R&D intensive start-ups, reduce the risk for existing companies looking to develop a new product or reward companies for the design and implementation of a novel and innovative manufacturing process. We have a wealth of experience in helping our clients with R&D claims securing cash credits up to £1million

What industries qualify?

The relief is not sector specific. Corrigan Associates has made successful claims for companies in the following industries:

  • Engineering
  • Software
  • Semiconductor
  • Travel
  • Television/Film
  • Food

What are the general criteria?

A project may qualify if it is looking to achieve an advance in technology/science in a particular field of expertise where in order to achieve the advance the company must overcome technological/scientific uncertainties where the knowledge is not readily available to a trained professional.

Companies with less than 500 staff, a turnover of under €100m or a balance sheet total under €86m can make claims under the generous SME rules. Under these rules, qualifying expenditure on a qualifying R&D project can benefit from an additional deduction of 130% to claim against trading profits. Loss making companies can even claim a cash repayment. Qualifying expenditure may include:

  • Salaries (Employer NIC and Pension contributions)
  • Subcontractor costs
  • Software
  • Consumables
  • Externally provided workers

What if the projects are funded?

Companies can still benefit by making an R&D claim even where the expenditure is funded or subsidised. If a project is funded by a grant that is considered notified state aid, the project will be restricted to the less generous RDEC rules. This could still result in a cash credit even in respect of the funded expenditure!

Take advice!

The rules are complex especially if funding has been received or if a claim is being made under both the SME and RDEC rules. It is essential that advice is sought to ensure that the claim is correct and the relief claimed is maximised. With the right advice and guidance, a successful claim can be made efficiently with minimum disruption to the management team or technical staff.