14TH JUNE, 2019

Is my SME eligible for R&D Tax Credits?

If you are reading this, you probably want to find out more about R&D Tax Credits and whether it is applicable to your business.

In short, R&D Tax Credits enable businesses that incur costs in developing products, processes, software or services to receive a tax deduction or a cash payment from HMRC. It was designed in 2000 as an incentive designed to encourage innovation with SME’s and start-ups exclusively in the UK.

It is one of the government’s top incentives, yet many businesses do not realize that they qualify for it.  On average, SME’s are claiming around £46,000 per annum.

So who exactly qualifies for R&D Tax Credits?

Everyone! Any company, in any industry can qualify for R&D Tax Credits. There are a few key things to remember; such as the company should be taking advancements in their development to show that they are making a difference to technology. For example, you must show that you looked to advance the field, but also demonstrate the hurdles; how you overcame them as well as show that a professional in that field was unable to work it out.

Essentially, if your company is having a certain amount of risk through this R&D to advance technology, whether it is a product, process or service, then it is highly likely to be eligible. Once your business starts scaling it is important to consider the amount of innovation that will take place in the coming years and getting ahead of the curve with a trusted partner for R&D Tax Credits is a great place to start, and will be covered later in this blog.

This is great for businesses across a variety of sectors, as it is encouraging innovative behaviors and attitudes rather than penalising it with costs, however the eligibility criteria is not as black and white as other tax laws, making it difficult if a business or C-Suite executive has never dealt with it previously.

How to apply for R&D tax credits as an SME?

At this stage, if you think that you are eligible, there are a couple of options that you can consider. Firstly, you can go through the process yourself, which will consist of timely research as well as engaging with the right individuals to assess your R&D to see whether you are eligible. The benefit of doing this means that you are educating yourself on this area of business, but the difficulty that you might face is lack of expertise and not getting the maximum amount of tax that you are entitled to, and with 2bn per annum being claimed, you definitely do not want to miss out.

The second option is to engage with a trusted specialist to help guide you through the process, through an initial consultation all the way to finalising the papers, as another part of the process is looking back through 2 accounting periods to get the most accurate results. Working with a trusted specialist such as Tax Cloud cuts out the stress of having to learn this area on your own, and also means that you have a trusted partner for future ventures.

To find out more, contact us directly as Tax Cloud is a trusted partner through Myriad Associates.

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
David Farbey David Farbey MA, FISTC, FRSA Technical Consultancy Director
Deborah Chapple Deborah Chapple ATT Corporate Tax Director
Lauren Olson Lauren Olson MA, MISTC Senior Technical Consultant