Everyone likes an alliterative title opening, don’t they? Takes you back to school days where you mastered similes, metaphors and alliteration along with other figurative language devices.
Today though, that title rings true for so many companies, with many unaware of the tax savings they can make from research and development.
Research and Development (R&D) Tax Credits are a UK tax incentive designed to encourage companies to invest in R&D.Companies can reduce their tax bill or claim payable cash credits as a proportion of their R&D expenditure.
They’re a fairly recent phenomenon too, having being introduced in 2000, just twenty years ago.
The scheme was introduced in 2000 for small and medium enterprises (SMEs), with a separate scheme for large companies launched in 2002 (see R&D Expenditure Credit or Above the Line R&D Tax Relief). Any company carrying out R&D is likely to qualify for the relief. The definitions of eligible R&D and eligible costs are reasonably broad, and eligible R&D activities often take place across the whole range of company operations.
What you may or may not realise is that the scope for claiming R and D tax credits is broad. It covers many sectors, like the examples highlighted on our Case Studies, like: food and drink, architecture and product development, to highlight just three examples.
They are calculated from your expenditure on R and D. You need to highlight qualifying spendings and create what is known as “enhanced expenditure”.
You then have three potential outcomes:
We know you’re unlikely to be one of these behemoths but the list does highlight R&D expenditure by these companies:
To find out whether you are eligible, contact us today.