What R&D Tax Relief Can I Claim?
Determining which R&D tax relief applies to your business is paramount. Claiming the incorrect relief will result in two outcomes:
1. Your claim will be too small, resulting in you missing out on money that you are fully entitled to, or
2. Your claim will be larger than it should be, creating the real possibility of an HMRC enquiry and chargeable penalties.
But no need to worry! Our team at LimestoneGrey are here to help you unjumble the jargon and build your R&D tax credit claim using the right treatment. We are able to use our expertise to ensure that your claim is prepared correctly.
Which R&D Tax Relief is Right for my Business?
In order to determine which relief is right for you, we firstly must look at three areas of your business:
1. Gross Assets
2. Staff numbers
The SME Research & Development Tax Relief
SME R&D Tax Relief is available to small and medium-sized businesses and allows companies to recoup up to 33% of their research and development costs, either as a payable tax credit, a tax reduction, or even a combination of the two.
The Research and Development Expenditure Credit (RDEC)
The Research and Development Expenditure Credit (or RDEC for short) is designed to allow larger companies that are subject to UK corporation tax claim tax relief up to the value of up to 13p* for every £1 spent on qualifying research and development activities.
*Unlike SME relief, RDEC is taxable income, leaving the company with up to 11p for every £1 Spent on qualifying activity after the deduction of tax.
SMEs will need to claim RDEC relief under particular circumstances, for example, if they have been subcontracted to complete research and development work by a large company or they have received a certain government grant. LimestoneGrey will be able to clearly identify your company’s position, ensuring that your business is claiming the correct relief.