R&D Tax Credits Made Simple For Small Businesses

While you may have heard the phrase R&D tax credits being mentioned more frequently in the news as of late, you’d be forgiven for not knowing what the term is actually referring to.

With so many different types of tax being discussed at any given time in the media, it can be hard to keep up and distinguish between them all.

If you want to find out more about R&D tax credits, whether your company is eligible and how our service can help make the process easier, keep reading.

What are R&D tax credits?

In a nutshell, R&D tax credits are a way for businesses to be reimbursed for any type of development endeavour they carry out.

Any company that spends money developing new products, processes or services; or enhancing existing ones, are eligible for either a cash payment or corporation tax reduction.

If your company is currently making a loss on research and development, you can choose to cash-in on said losses that come as a result of a HMRC claim.

You will then be issued with a repayment from HMRC instead of your company having to carry forward this loss.

There are a number of different schemes available which will be tailored to different businesses needs so you can be sure that you are maximizing your returns.

How do I know if my company is eligible for R&D tax credits?

Luckily, qualifying activity requirements are quite broad, which means that if your company is taking risks that involve developing new products or services or implementing modifications to existing ones, it’s likely that you are eligible.

There are no restrictions placed on the obtainment of these tax credits with regards to sector or size, meaning small businesses from a wide variety of industries will be able to cash in on R&D tax credits.  

Failed projects will also be eligible, as HMRC does not specify that the research and development that is carried out needs to be successful.

If you are still struggling to determine whether your company is eligible, our online service couldn’t be more straightforward and user-friendly. Simply input your company details online along with your R&D projects and costs, and our highly-trained consultants will be able to support your claim at different stages, offering feedback to ensure you keep moving in the right direction towards a claim.

What type of activities can I claim for?

During the process of research and development your company can rack up a lot of different types of costs, so it’s good to know that you will be able to claim back money spent on a number of things including:

  • Staffing costs such as salaries and pension contributions
  • Software license costs
  • Materials and consumables including heat, light and power
  • Subcontractors and freelancers

Hopefully, this blog has cleared up some of your questions regarding R&D tax credits. If you'd like more information, simply get in touch:

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Barrie Dowsett, ACMA, GCMA
Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud
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Myriad Associates helps businesses maximise tax reliefs and secure R&D grant funds. We specialise in R&D Tax Credits, Video Games Tax Relief, Innovate UK grants, Horizons 2020 grants, and Research and Development Capital Allowance Claims.

  • Submitting R&D tax claims since 2001
  • 100% success rate
  • Over £100m claimed and counting
  • Industry leading specialists
  • In-house technical, costing and tax experts
  • Member of the Research and Development Consultative (RDCC) committee

Meet some of the team behind Tax Cloud

Barrie Dowsett Barrie Dowsett ACMA CGMA Chief Executive Officer
Lisa Waller Lisa Waller CTA, ACCA R&D Tax Manager
JEan Rollinson Jean Rollinson Senior Technical Analyst/Writer
Rabia Mohammad Rabia Mohammad Corporate Tax Associate