Often the problem for companies is recognising what activities qualify for R&D Tax Credits.
Our team has a diverse business background, supported by accountants well-versed in R&D Tax Credits claims. This expertise allows us to easily highlight areas of process and product development that our clients (and/or their accountants) may have overlooked as qualifying for research and development tax incentives.
Which one are you?
There are two very straightforward R&D Tax Credit claim schemes which HMRC operate: the Small and Medium-sized Enterprises and the Large Company R&D Tax Relief Schemes. Companies can claim relief on their research and development activity through either scheme, depending on their size, turnover and balance sheet.
The Small and Medium Enterprises R&D Tax Relief Scheme
A company is considered an SME for R&D Tax Credit purposes if they have fewer than 500 employees and either an annual turnover not exceeding £84 million, or a balance sheet not exceeding £72 million.
The Large Companies R&D Tax Relief Scheme
Companies are considered Large Companies if they exceed the SME threshold. However, some parts of a Large Company can be considered an SME for R&D tax relief purposes, so it’s best to speak to us about this so we can clarify your company’s position.
Seems easy…so why don’t many businesses make an R&D Tax Credit claim?
Excellent question. Simply put, people are unaware they are the kind of business that qualifies for R&D Tax Credits or of how much credit they can claim. This programme is coordinated by a dedicated R&D Tax Credit claim team within HMRC, but the cash is actually coming from a European Fund. Whilst UK government remain committed to ensuring that UK companies receive a full share of the funds available, the UK, has in fact, lagged behind its European neighbours in embracing this opportunity. This is a trend we are working to reverse.
The following are the most frequent scenarios we encounter. These not only demonstrate the typical ‘advisory mindset’ within UK companies, but also the under-subscribed nature of the UK market and the benefits of using a specialist practice like us to process your company’s R&D tax credit claim.
The company secretary said the accountancy firm it employs still doesn’t really understand how the business is getting the money back, adding: “it’s not a part of their normal exercise, or what accountants normally do.”