InnovationStrategy

R & D Tax Relief Scheme – Do you qualify?

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InnovationStrategy

R & D Tax Relief Scheme – Do you qualify?

Research and Development (R&D) is crucial for an economy’s productivity and long-run growth. This is why R&D tax relief plays a key role in the government’s objective for productive investment.

R & D Tax Relief Scheme – Do you qualify?

R&D investment by smaller firms is vital for the performance of the UK economy, and SMEs accounted for over 80% of all R&D claims.

R&D tax credits have been around for a while now and yet HMRC studies suggest that as many as nine out of ten businesses who are actually eligible for the relief, aren’t claiming it.  When you consider that the average claim for an SME is around the £50,000 mark it’s a very valuable relief for small businesses to be missing out on.

Why are businesses are missing out? One, is they just don’t know that the relief is there or they know that it’s there, but they’re not claiming enough. They’re not looking into the amount of different projects that would qualify. The other reason is the complexity around HMRC’s guidance. There is a lot to look into and it is very time consuming to understand, analyse and put a report together.  It simply puts business owners off. Most business owners do not realise or think that what they are doing is research or innovation!

The range of work available for this relief is very wide and well worth the time involved in looking into it. Anything helping an advance in science and technology can be subject to relief. This of course is a very wide area and if you can show that what you are developing is a new process, product or service or improves on an existing one you could be eligible. Most businesses do not realise that something that they are developing would fit into this criteria.

If you’re doing anything which is solving problems and whether they are your own problems or the problems of your clients then you need to explore whether they would be relevant for this relief. Getting an expert opinion would be a good place to start as they may be able to help you save a lot of time and effort – your accountant would be a good place to start.

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