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There are tax breaks to encourage R&D activity because it is so important. R&D allows a company to stay on top of the competition, it is crucial – without R&D a company may not survive.
R&D tax credits can reduce the tax bill for profitable companies, increase losses (saving tax in the future) for others and for some loss-making companies provide finance to assist in meeting costs. We can guide you through the requirements and assist you in making a claim.
We will review your business, its structure and activities and with you ascertain how much of your activity relates to qualifying R&D. We will then liaise with you to work out which R&D tax relief is available to you, either: –
Whilst the uptake on R&D claims has increased over time it does seem that there are still a lot of companies missing out on valuable reliefs. We never want our clients to over-pay tax.
We will spend time with you to understand your business so we can help you identify the reliefs available and make the relevant claims. We believe you and your team are best placed to identify the innovative nature of what your business does – you know it better than anyone. We will give you the guidance you need to be able to identify R&D costs and will then work with you to formulate both the actual claim and the necessary explanations for HMRC to support this.
What are research and development tax credits?
Research & Development (R&D) tax credits are a tax relief allowing companies to reduce their corporation tax liabilities (and in some cases enabling tax refunds) who are engaged in qualifying R&D activity. Qualifying expenditure must be incurred however in creating new products or processes or improving existing ones. They are available for both small and medium sized companies (SMEs) and large corporations to encourage innovation and growth in business for the UK in that the more companies invest in R&D, the more they will have to spend on innovation.
How do you qualify for research and development?
To qualify for R&D tax credits, you must prove that your company has undertaken work as part of a specific project that seeks to make an advance in science or technology that relates back to your company’s trade. The project can focus on a product, new process or service either improving it or inventing it from scratch, however, you must be able to demonstrate that the work done could not be easily worked out by a professional in the field and that you have had to overcome or tried to overcome uncertainty. In other words, you must prove that you are striving to make an advance in science or technology to improve industry in the UK. At Mercer & Hole, we can meet to discuss the nature of your company’s work to ascertain whether you are eligible to claim R&D tax credits.Book a call >
If your company is deemed eligible, you can claim on the following expenditure:
The R&D tax credit can return from 10.53% to 33.35% of your qualifying expenditure on R&D projects. How much you can claim will depend on the proportion of your business activities that count as R&D, the associated costs, your company’s financial position (i.e., you can still claim a percentage if you are not in profit), the size of your business and which scheme you apply through. At Mercer & Hole, we can work with you to ensure you are claiming on all qualifying expenditure and not missing out on eligible projects.
Broadly speaking, HMRC look for evidence the projects you are claiming for demonstrate:
Due to the complexity of certain projects, it might be harder to prove eligibility. We would advise seeking professional advice to ensure that you are providing HMRC with the correct amount of detail to demonstrate eligibility. At Mercer & Hole, we are well versed in dealing with HMRC and the level of detail required. We spend time getting to know your business and will give you the guidance you need to be able to identify R&D costs and will then work with you to formulate both the actual claim and the necessary explanations and narratives for HMRC to support this.
At Mercer & Hole we have experience of preparing R&D reports and claims for a wide range of companies operating is many different sectors. We will work with you and your technical team to fully understand the work you are undertaking and assess its eligible for R&D tax credits. We operate a pragmatic approach but will exercise care to present a claim that is valid and robust under scrutiny. We have an excellent record of securing significant corporation tax savings for our clients.
We worked with Jellyfish Pictures to provide a cost effective approach to R&D tax credits, saving them both time and money. Providing 100% fee transparency, 0% commission basis and templates that HMRC recognise.Read Case Study >
Research & Development (R&D) tax credits are a tax relief allowing companies to reduce their corporation tax liabilities (and in some cases enabling tax refunds) who are engaged in qualifying R&D activity. Qualifying expenditure must be incurred however in creating new products or processes or improving existing ones.
Click here to go to our flowchart which will help you gain an understanding if you qualify for R&D tax credits.Enquire now >
Mansel Turnham, Corporate and Business Tax Director speaks about the benefits of R&D tax credits and five reasons why you should use Mercer & Hole for your company’s R&D accounting requirements.Enquire now >
We inspire confidence. We are recognised as a top 20 firm for tax in the UK and, with a significant proportion of our partners specialising in tax, you will benefit from exceptionally high levels of technical expertise and experience. We will advise you accordingly, enabling you to plan with realistic ambition.
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