RESEARCH AND DEVELOPMENT
(R&D) TAX CREDITS
We have helped a number of our clients make successful R&D claims over the past few years. With incentives for small and medium companies substantially increasing over recent times the potential tax savings for SME’s has made this a very valuable area of tax relief for some clients.
The R&D tax credit allows you to claim back expenditure which has been used for R&D activity at a rate of 225%, giving potentially sizeable deductions from profits and reducing corporation tax liabilities. Companies that are loss making and therefore do not have profits to set the expenditure off against are able to claim cash back equivalent to 32.6% of the expenditure. In both cases it provides companies with a cash flow advantage either by way of lower tax bills or a repayment from HMRC.
We work with experts in the R&D field to identify the potential for an R&D claim and then follow this through, working with you and your team to improve systems for identifying expenditure for the future and producing the annual report to support your claim with HMRC.
5 years ago we identified the potential for an R&D claim for one of our clients whose company’s activities involve importing. Our R&D specialist spent some time with the directors and key management of the company and they made their first claim in 2011. Since this time the company have continued to make annual R&D claims and with the help of our specialist have to date identified £1.2m of R&D expenditure and have saved £326,000 in corporation tax.