If you’ve made it this far onto our website, then you’ll know that carrying out research and development could make you eligible for some potentially significant reimbursement. It can, however, be difficult to work out whether or not the work you’ve carried out qualifies as R & D.
In our latest blog, we’re doing what we can to explain exactly what counts as research and development, clarifying some of the uncertainties surrounding the topic.
It can be helpful to start pieces such as this one with a definition, so that’s what we’re going to do. According to Investopedia, R & D refers to “the work a business conducts toward the innovation, introduction, and improvement of its products and procedures”.
If we consider this idea to begin with, we start to get a rough idea of what might qualify as research and development. Essentially, the above definition would imply that if you’ve worked to improve a procedure or a service, that work may well count as R & D.
Now that we’ve heard a definition (albeit a broad one), it’s time for an example. For argument’s sake, we’ll use the example of the technology sector. Recent innovations such as fingerprint recognition software would arguably count as R & D; they’ve solved the problem of people forgetting passwords to their phones, and also improved security. At its inception, it was a new feature, which is also an important qualification.
Essentially, any new solution to a previously unsolved problem would count as research and development.
A number of sectors are arguably more likely to require research and development than others. For example, the manufacturing, information technology, and science and pharmaceuticals sectors all present themselves as clear areas in which research and development would be commonplace. While there are others, these three are among the most common – if you suspect, however, that your work may qualify as R & D and you’re working in another sector, it’s still worth enquiring to be sure.
If you’re working in one of these sectors yourself, it’s definitely worth considering whether you could qualify for R & D tax credits.
If you’ve read through our blog, and have decided that you have, indeed, carried out research and development work, you may well be eligible to claim tax credits for that work.
To find out more about your options, and to see how much you could potentially claim in R & D tax credits, get in touch with randd uk ltd. You can fill out one of our online contact form, or give us a call on 01332 477 070.