Is Your Business Eligible For R&D Tax Relief?

If you haven’t considered your company’s eligibility for Research and Development (R&D) Tax Relief (also known as R&D Tax Credits), you could be missing out.

What is R&D Tax Relief?

R&D Tax Relief can help innovative organisations by reducing their tax bill. And loss-making companies can claim too, as the Tax Relief can help them generate tax credit repayments. The rates of relief are different for large companies and for SMEs and companies can receive cash credits for projects worked on from as long as two years ago –up until their next corporation tax payment is due.

Is your company missing out on the incentive?

If your company doesn’t work in a scientific industry, don’t just assume that it doesn’t qualify for R&D Tax Relief. In fact, the guidelines for research and development Tax Relief don’t impose any restriction on the industry in which you work. Instead, the possibility to qualify depends on the type of projects your company works on. All companies that work on “solving technical uncertainties” by making advancements in science or technology may be eligible for R&D Tax Relief.

Technical uncertainties

Does your technical team have ‘head-scratching’ moments? In order to qualify for R&D Tax Relief, you need to show that your company is working on a project that tries to solve a scientific or technological challenge. It’s important that the intention is to make an overall scientific or technological development, and not just an advance in your company’s knowledge.

Examples of projects qualifying for R&D Tax Relief

Does your company undertake any of the following activities? If so, you will most likely be eligible for R&D Tax Relief:

Manufacturing and engineering R&D Tax Relief examples:

• Designing and developing cost-effective and innovative operational processes
• Integrating new materials to improve product performance and manufacturing processes
• Evaluating and determining the most efficient flow of material
• Developing processes that would meet increasing regulatory requirements
• Streamlining manufacturing processes through automation
• Innovative product development using computer-aided design tools
• Development of second generation or improved products
• Designing, constructing, and testing product prototypes
• Tooling and equipment fixture design and development
• Developing unique computer numerical control programs
• Designing innovative programmable logic controllers
• Designing innovative manufacturing equipment design
• Prototyping and three-dimensional solid modelling

Software R&D Tax Relief examples:

• Tools to extend the functionality of application software programs or of an operating system
• Extensions to database software, programming languages, or operating systems
• Software development tools, such as tools to port data across platforms, tools for image processing or character recognition
• Novel data management techniques, such as new object representations and new data structures
• Innovative methods of capturing, transmitting, manipulating, and protecting data
• Software to run new computer hardware
• Software to run on devices with pre-installed operating systems, such as handheld GPS, mobile phones, and tablets
• Means of integrating hardware and software platforms

Speaking to the team of specialists at Tax Cloud today will enable you to determine whether your business matches the necessary criteria and whether any credits can be claimed for the projects you have conducted. Click here to contact us today for more details.

Are you an Accountant or Financial Controller interested in more information on R&D Tax Relief?

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Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud