R&D tax relief – make your innovations more tax efficient

3rd March 2017

Carrying out research and development (R&D) that helps make even modest advances in science and technology means that your business could be in line for generous R&D tax relief benefits. Although we’ve seen an increase in clients taking advantage of this relief, many businesses don’t realise they are eligible and could be missing out on significant tax savings.

R&D tax relief for small companies provides an enhanced deduction of 230% of qualifying R&D revenue costs. Essentially, this means that for every £100 of qualifying R&D costs, £230 is deducted from the company’s profits, or added to the company’s trading losses for tax purposes.

The key to a successful R&D tax relief claim is being able to prove to HMRC that the project directly contributes to achieving an advance in science or technology through the resolution of technological or scientific uncertainty. This can include adapting knowledge from another field of science or technology.

The aim of the R&D project can be to create a new product, a material, or change or improve an existing process. Even if the innovation doesn’t work, a failed R&D project still qualifies for tax relief.

We have already worked on a number of successful and often substantial claims, with more claims coming in all the time. Many businesses have traditionally missed out on claiming R&D tax credits through not realising they were eligible. By raising awareness of the scheme, we hope to see more companies incorporating this valuable relief into their tax planning.

If you think your company might be eligible for R&D tax credits, please contact us to find out how we can help on 01926 422292. Alternatively, take a look at our factsheet for more information.