Do I Qualify for R&D Tax Credits?
More companies qualify for tax relief on R&D than you may think. You don’t need to have a PHD or work in scientific labs to qualify for R&D tax credits, but you do need to demonstrate that your company was faced with technical or scientific challenges where the solution was uncertain.
Establishing a Company’s Eligibility
Step 1 - Do you have a project?
In order to make an R&D tax credits claim, firstly you need to identify if your company has undertaken a project. A project could have tried to achieve any of the following:
Create
Sometimes you just need to start from scratch. If you’ve created something new within your industry, you could be claiming research and development tax reliefs.
Your project could be:
- Creating new products
- Creating new processes
- Creating new software
- Creating new services
- Creating new devices
Improve
Have a product that’s not quite there yet? Or maybe you needed to enhance a technical process. If you’ve made appreciable improvements to products, processes, software, services or devices, you could make a tax credit claim. Improvements could include:
- Updating your products to ensure they meet new legislative standards
- Making improvements to a production line to improve efficiency
- Implementing new and improved features to your software system
Duplicate
Duplication is an area that can be overlooked when it comes to R&D tax credits. If you find something good in the market and you work towards duplicating it, as long as the process of achieving the breakthrough is a trade secret, this could still qualify you to make an R&D tax credit claim. This could include:
- Duplicating an existing product, device or software
- Replicating a process
- Reproducing a service
It is probably safe to say that the majority of companies meet at least one these criteria.
Step 2 - Identifying the Challenges
The second criteria is where your eligibility will be confirmed. Think of an R&D project as a journey. During this project, if you were faced with challenges where you believe a competent professional in the industry would not be able to routinely deduce or find a solution, the work undertaken to overcome the challenges could qualify for research and development tax credits.
These challenges need to be of a scientific or technical nature. Business challenges such as marketing, HR and staffing, will not qualify.
Ready to Make a Claim?
If you feel that your business meets these two criteria, it is likely that your project could qualify for R&D tax credit relief. Why not speak to one of our experienced tax advisors who will be able to confirm your eligibility.
Misconceptions surrounding R&D tax credits
From chatting to companies over the years, you begin to hear recurring statements about the relief that are just simply not true. It is important that we separate the facts from the fiction to ensure that companies do not rely on this false information. So, here are some of our favourite myth busters.
With such a vibrant start-up community in the UK, it is so important that businesses know that there is no minimum, or indeed maximum, amount a company has to spend on their research and development activities in order to make a claim.
Unfortunately this is not the case. You have two years from the end of your accounting period in which your R&D took place to submit a claim. After this date, it is too late, the benefit is lost.
This is simply untrue. Companies can still make a research and development claim and benefit from a cash payment from HMRC if they are loss-making. As long as you are undertaking qualifying activities within your research and development project, you can still claim a payment.
If your project did not deliver on its objectives, you can still submit a claim. HMRC want to reward those that work towards research and development, even if the projects aren’t successful. So, even if your research and development project hasn’t been successful, you can still claim against qualifying activities.
We completely understand that the process can be overwhelming for most, but with LimestoneGrey’s help, it can be straightforward. Our team of research and development tax credit specialists are here to make the process as simple and stress-free as possible. We start with a meeting where we discuss your business, projects and R&D activities. From here, our team work with you to gather the information needed to prepare an R&D submission ready for review by HMRC. We submit the final claim and report to HMRC, liaising with them until you receive your R&D tax relief benefit.
No matter what type of grant you may have received, a claim can still be made. However, in certain circumstances, it will affect the amount you are entitled to.
R&D tax credits are available to a variety of sectors. LimestoneGrey have successfully helped companies across a number of industries, including construction and agriculture to software and manufacturing.
Do all sectors qualify for R&D tax credits?
Yes. Regardless of the misconceptions, claiming research and development tax reliefs is available to companies in any sector, as long as you meet the qualifying criteria. From agriculture and construction, to software and financial services through to, engineering and life sciences, LimestoneGrey are here to help you regardless of your industry.
Here are some of the sectors we assist…
Agriculture
Fintech
Software
Construction
Manufacturing
Engineering
Life Sciences
Information Technology
Retail
Tailored R&D Tax Relief Advice with LimestoneGrey
At LimestoneGrey we have experience and expertise in working with a range of companies, regardless of their size or sector. Our team specialise in R&D tax claims and have extensive knowledge of the claim creation process, so you don’t have to. We tailor our service to meet the needs of each client, guiding you through every stage of the process.
