R&D Tax Relief FAQs
Here are some of the most commonly asked questions with regards to R&D tax relief claims. If you have further questions, or want to move forward with a claim, get in touch today.
What is R&D Tax relief?
Research and development (R&D) tax relief was introduced in 2000 as a way of rewarding businesses that were investing in research and development. The tax credits allow companies that incur costs whilst developing new products, processes or services to claim the rebate as a cash payment or tax deduction (depending on your circumstances).
Across the UK, the average SME claim is approximately £55,000* – therefore a great source of funding for many businesses. To find out more about R&D tax claims click here.
My accountant thinks I may not be eligible, and hasn’t entered a claim – is this right?
Whilst your accountant may think this, it is often worth getting a second opinion – we have worked with many clients who were advised that their business would not meet the criteria, and have then received successful claims from HMRC.
It is through our specialist experience in this field that we are able to spot opportunities for claims that may have previously been missed. Similarly, we have also completed retrospective claims for businesses whereby their previous claims weren’t maximised.
Can I claim if our R&D is done by other people?
If you use specialist subcontractors to assist in particular phases of the claim, you may be able to claim a proportion of these costs back under HMRC’s criteria.
My business didn’t keep detailed records of R&D time and costs during the project – are we still able to claim?
Firstly, our team will review the evidence you have, and assess whether it meets the criteria set out by HMRC. If you have not submitted a claim before, they can sometimes be more lenient towards this issue. We can discuss a potential claim based on a “reasonable assessment” for time estimates relating to qualifying activities.
Is my business too small to claim?
If your business is liable for corporation tax then you could be eligible for a claim – in fact the scheme for SMEs is more generous than for large companies – find out more about the two schemes in our ‘R&D tax credits explained‘ section.
Can I claim for a project that failed?
Absolutely – the Government introduced R&D tax relief as a way of rewarding innovation, not necessarily just success, therefore within their criteria they do allow for unsuccessful projects to be claimed against.
If you have an unsuccessful project you can still make a claim up to the point where you consider the development failed and was aborted. We can determine which projects can be included in your claim.
How long does an R&D tax claim take?
The length of time a claim will take is dependent on a number of factors including the complexity of the claim and how complex your accounts are.
As a rule of thumb, HMRC aims to process claims within 28 days of receiving the necessary paperwork. Using a specialist can greatly speed up the processes as it reduces the amount of queries from HMRC, which can delay a claim.