Are you utilising the R&D tax reliefs and incentives that are available?
Large Companies and R&D tax credits
Large companies undertaking qualifying R&D activity are entitled to a research and development expenditure credit (RDEC) of 13% from 1 April 2020. For a 19% taxpayer, this typically results in an 10.5% net benefit after tax. Even those companies with nil CT liability may be eligible for a repayable tax credit subject to the 7 steps outlined within CTA09.
SMEs and R&D tax credits
SMEs undertaking qualifying R&D activity are entitled to a research and development deduction of 230% in relation to qualifying spend. As with the RDEC scheme those companies with a nil CT liability (or in the circumstances that the additional R&D deduction creates a loss), can offset tax losses for a repayment of up to 14.5% of the surrenderable loss.
What is R&D?
R&D can take place in any sector or industry provided the claimant company is undertaking a project which seeks to achieve an advance in science or technology through the resolution of scientific or technological uncertainty. Our R&D specialists have experience of compiling claims in all sectors, and specifically those noted below:
- Automotive
- Construction
- Environmental goods and services
- Food and beverage
- Manufacturing and design
- Software development and AI
- Specialist clothing & apparel
- Telecommunications
The complexities of claiming R&D tax credits
UHY Ross Brooke have a team of R&D tax specialists who can guide you through the complexities of the regime to maximise your benefit whilst reducing the risk of HMRC enquiry. Our specialist accountants can assist in compiling your claim with a wealth of experience of claiming qualifying indirect activities, long term project recognition, accounting for RDEC and revenue and capital distinction.
Administrative procedures and timescales
The R&D tax credit claim must be filed within two years of the end of the accounting period to which it relates. Companies may therefore file amended claims up to the first anniversary of the filing deadline for the corporate tax return using our dedicated corporate tax team and specialist software.
Get in touch to find out how we can help you with your R&D tax credit enquiry.
Get a FREE review of your R&D process and a copy of the UHY Research & Development Tax Relief Guide
Companies applying for R&D tax credits need to follow the rules carefully in order to maximise their tax relief. New changes to the R&D tax credit scheme come into force from 1st April 2023 aimed at reducing incorrect or fraudulent claims, improving compliance and encouraging UK innovation.
UHY Ross Brooke is delighted to offer a complimentary review of your research and development tax credit process with one of our R&D tax credit specialists. Please fill in the form below for your free review and Tax Relief Guide.
