R&D Tax Credits

Is your company carrying out any innovative work?

Have you made technological or scientific advancements in your field of work?
Have you tried to improve new products or processes, whether successful or unsuccessful?

If there is an element of technological or scientific uncertainty involved in getting from A to B in a business process, there is scope for a potential R&D claim.

What are R&D tax credits?

R&D tax credits are a form of tax relief that rewards companies in the UK for investing in innovation.

In most cases, the company has already spent money on research and development – so the work is done! Why not earn an additional cash saving to reinvest in further R&D?

Who can make a claim?

Companies that spend money to develop new processes, products or services (or improve existing ones) are eligible to make a claim.

Relief is not in correlation to the size or revenue of a company.

What is the average claim value?

There is no minimum or maximum claim value (subject to the PAYE cap), so an average claim value is not really relevant.

However, R&D relief can reduce your tax bill and should be at the top of any tax-saving plans for companies.

£7.4 billion was paid in respect of R&D claims during the year to 31 March 2020.

Are R&D tax credits a form of tax avoidance?

R&D tax credits are a legal tax incentive scheme promoted by HMRC, not a tax avoidance scheme.

Does innovation need to be ground-breaking to qualify?

Innovation does not need to be incredibly inventive or innovative. There just needs to be an element of technological or scientific uncertainty involved in getting from A to B in a business process.

Can you claim if innovation was unsuccessful?

You can claim R&D tax credits regardless of the success of a project.

Can you claim if your company is loss-making?

You can claim R&D tax credits even if your business is loss-making. The surrenderable loss can generate a repayable tax credit.

How far can you backdate a claim?

Companies can make an R&D claim within 2 years of the end of the accounting period. For 30 September 2020 year-end, the claim deadline is 30 September 2022.

How long does it take to make a claim?

An R&D claim can be put together within a couple of weeks as long as the information is readily available.

About Wbg

We have a 100% success rate for R&D tax credit submissions. Our in-house specialist, Shehzad Ashaq, can help you claim this tax relief.