14TH DECEMBER, 2018

4 Ways To Determine If You Qualify For R&D Tax Credits

In 2002, the government introduced the research and development tax relief scheme for small and medium-sized enterprises (SMEs), providing support to companies who innovate and encouraging R&D expenditure across the UK. In 2016/17, the average claim for SMEs was £53,876, with £3.5bn claimed last year from nearly 40,000 claims. These figures would indicate that although there is an increase in claims, there are plenty of SMEs currently not claiming.

To help your SME understand if your project is suitable for an R&D claim, we’ve provided the 4 essential questions you should ask yourself to determine your eligibility.

4 ways to determine if you qualify for R&D tax credit

1) Has your project sought an advance in science and technology?

Your project must aim to create an advance to your overall business field, not just your company. This means an advance can’t just be an existing technology that has been used for the first time in your sector.

2) Has your project had to overcome uncertainty?

The project must solve a problem or provide an easier, more efficient or more effective solution, which was not previously possible. This means that your company or experts in the field can’t already know about the advance or the way you achieved it.

3) Can your project demonstrate research, testing and analysis?

You should show that the R&D needed research, testing and analysis to develop it. A simple description of the challenges and successes of the project will suffice to show your process.

4) Would a professional in the field find it easy work out your project?

Another professional should not have been able to come to the same conclusion easily. This can be shown by proving that others on the R&D team are professionals and having them explain the difficulties encountered, or by showing other failed attempts to achieve your advance.

R&D Tax Credits Apply to Many Industries

If you can prove that your project achieves all the above points, you will almost certainly be eligible for R&D tax relief.

This can apply to any company, in any sector. From social media and video games to tooling manufacture and packaging solutions, R&D tax relief applies to many fields. For example, 295 claims in 2016/17 were from the forestry, agriculture and fishing sector. Companies are realising that R&D tax credits are a viable option for many, leading to a steady increase in first-time applications, with over 10,000 in 2015/16.

For example, Daften Die-Casting were unaware that much of their development activity met the criteria for R&D tax credits and thus, nearly missed out on an R&D tax claim relating to £300k worth of research and development activities they had carried out.

Final Thoughts

Though the process to apply for R&D tax credits may appear daunting to SMEs and thus unattainable, the reality is very different. According to a September 2018 government report, each year the number of claims and amount claimed increases. The bottom line is that the criteria for R&D tax relief is attainable, even to those who feel they may not qualify. Ensure you are not missing out and see if any of your projects could claim R&D Tax Relief today. Simply email us and we’ll quickly let you know.

Barrie Dowsett, ACMA, GCMA
Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud
Latest posts
16TH JANUARY, 2019 What Projects Qualify for R&D Tax Credits in The Medical Industry?
11TH JANUARY, 2019 Accounting practices are generating fee rates of £325/hr
2ND JANUARY, 2019 R&D Tax Credits - It's Not As Difficult As You Think
14TH DECEMBER, 2018 4 Ways To Determine If You Qualify For R&D Tax Credits
26TH NOVEMBER, 2018 What Projects Could Be Eligible For R&D Tax Relief in Manufacturing?
2ND NOVEMBER, 2018 How To Know If Your Business Is Entitled To R&D Tax Credits
25TH OCTOBER, 2018 Why Isn’t The Agricultural Industry Claiming R&D Tax Credits?
10TH OCTOBER, 2018 Is Your Business Eligible For R&D Tax Relief?
3RD OCTOBER, 2018 The Most Common Mistakes People Make With R&D Tax Credits
18TH SEPTEMBER, 2018 #1 R&D Tax Claim Portal ‘Tax Cloud’ launches Xero Integration
14TH SEPTEMBER, 2018 What To Look For In An Online R&D Tax Credits Claim Portal
7TH SEPTEMBER, 2018 5 Ways To Grow Your Accountancy Practice
31ST AUGUST, 2018 Common Pitfalls To Avoid While Claiming R&D Tax Credits
24TH AUGUST, 2018 How Far Back Can I Claim R&D Tax Credits?
17TH AUGUST, 2018 Should I Use a Specialist or My Accountant For My R&D Tax Credits Claim?
27TH JULY, 2018 3 Things To Consider When Making An R&D Tax Credits Claim
13TH JULY, 2018 R&D Tax Credits – Don’t Fall Through The HMRC Trapdoor
25TH JUNE, 2018 Tax Cloud Shortlisted for Innovation of the Year
8TH MAY, 2018 Visit us at Accountex 2018, London eXcel
30TH APRIL, 2018 Benefits of A Self-Service R&D Tax Credit Portal
13TH MARCH, 2018 R&D Tax Credits Platform Tax Cloud Celebrates 100 SME’s Seeking Expert Support
5TH FEBRUARY, 2018 How R&D Tax Credits Can Help Your Startup Grow
29TH JANUARY, 2018 Getting the Best Returns From Your R&D Tax Credits Claim
22ND JANUARY, 2018 Introducing: The Tax Cloud Partner Programme
18TH JANUARY, 2018 What Costs Can You Claim Through R&D Tax Credits?
9TH JANUARY, 2018 Common Misconceptions About R&D Tax Credit Claims
13TH DECEMBER, 2017 Tax Cloud at FinTech Connect Live 2017
5TH DECEMBER, 2017 R&D Tax Credits Made Simple For Small Businesses
4TH DECEMBER, 2017 Innovate UK Launches £50m Innovation Loan Pilot Scheme
3RD DECEMBER, 2017 Video Games Tax Relief Scheme Extended
20TH NOVEMBER, 2017 The 3 Things You Need To Consider When Making An R&D Tax Credits Claim
Popular Tags
Start your Tax Cloud claim now Discover if you qualify and ensure your R&D tax claim is maximised. Get started
Powered by

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 ACMA CGMA Chief Executive Officer
David Farbey MA, FISTC, FRSA Senior Technical Consultant
Deborah Chapple ATT Corporate Tax Senior Associate
Lauren Olson MA, MISTC Technical Consultant