Although Government statistics have shown a marked increase in the uptake of its Research and Development Tax Relief Scheme, there remains certain misconceptions around who is eligible to apply for R&D.
Introduced in 2000, R&D tax credits aim to encourage investment in innovation, allowing businesses to claim tax relief on eligible activities. The scheme means businesses can claim relief on their Corporation Tax liability, or receive a cash payment from HMRC. You can claim SME R&D relief if you’re a business with:
- Less than 500 staff
- Turnover under €100m or a balance sheet total under €86m
When looking at eligibility criteria, it’s useful to consider the definition of R&D – “a project which seeks to achieve an advance in science or technology through the resolution of scientific or technological uncertainty.”
R&D isn’t restricted to people in lab coats and software developers – the opportunity is there for all companies resolving technical challenges and extending knowledge or capability in their industry. The tax relief can even be claimed on projects that were unsuccessful.
Although R&D claims remain high in the scientific and technical sectors, the latest government report confirms that R&D is not limited to particular sectors, but instead centres on the types of activities carried out. Sector analysis for 2016/17 shows that claims were made under the SME R&D Scheme in Arts & Entertainment, Transport and Real Estate.
Led by David Herd, Champion’s dedicated R&D tax team have helped clients from a range of industries including Manufacturing, Hospitality and Retail. Many clients come to us for advice because they’re uncertain about their eligibility under the scheme.
David explains: “Often clients don’t realise just how much of their work falls under R&D, or they’ve been given bad advice previously which means they didn’t continue with a claim. However, our qualified tax experts are quickly able to determine whether a claim is worth pursuing.”
To see what you could claim, contact David Herd on: