Research and Development Tax
We understand that innovation is the driving force behind progress and growth for business. Research and development is at the forefront of this innovation drive, and we are here to help maximise the benefits of the research and development tax relief scheme in the United Kingdom for your business.
Find out more about the research and tax service provided by Spotlight Accounting Limited.
Spotlight Accounting, specialists in research and development tax consultancy
Our expert team have a wealth of experience in dealing with R&D tax credits. With an in-depth knowledge of the research and development legislation, they have a proven track record of successful claims.
Given the recent changes to the scheme and more stringent claim requirements, we believe it is important to understand how innovation propels your business. We aim to leverage and apply our comprehensive knowledge of the research development tax scheme to ascertain if your company meets the qualifying criteria for a successful claim.
Not only will we review past qualifying expenditures on your research and development projects, but we will also work with you to make suggestions and recommendations on how to maximise future tax claims.
What are research and development tax credits?
Research and development tax credits are a UK government incentive aimed at encouraging businesses to invest in innovation and technological advancements.
These incentives are designed to promote innovation and creativity, boost competitiveness, and stimulate economic growth by providing financial support to businesses investing in research and development activities.
In the UK, there are two main types of R&D tax relief schemes:
- R&D Tax relief for SMEs (Small and Medium-sized Enterprises)
SME’s can claim an enhanced deduction of 230% of their qualifying R&D expenditure. This means for every £100 spent on qualifying activities for R&D, the company can deduct £230 from its taxable profits. In cases where an SME finds itself in a taxable loss situation, SME limited companies can choose to surrender the losses generated by R&D activities in exchange for a cash refund, subject to meeting certain criteria.
- R&D Expenditure Credit (RDEC) for large companies
Large companies that do not qualify for the SME scheme can seek to claim R&D tax credits using the RDEC scheme.
There are many benefits to making research and development claims. These include:
- Financial incentives, including tax relief claims and cash refunds.
- By investing in R&D and making tax credit claims, you gain a competitive advantage by fostering innovation and growth.
- The tax savings received through R&D tax credits can help you allocate more resources towards future research and development projects.
How do R&D tax credits work?
R&D tax credits work by reducing the amount of taxable profit a company makes in an accounting period by an additional 130% of qualifying expenditure on R&D activities.
If the business is profitable, then it will reduce the amount of corporation tax payable to HMRC. If the business makes a loss, then the loss that is generated due to the enhanced expenditure on R&D activities can be repayable to the business.
Step 1. (Eligibility Check) – Is your company eligible? The first step in making a claim is to ascertain whether or not you meet the specific criteria.
To qualify for R&D tax relief, your company must be carrying out the following qualifying activities:
- The work must seek to advance science or technology.
- This work must involve a degree of scientific or technological uncertainty that cannot easily be resolved by a competent professional in the field.
Step 2. (Expense Documentation) – You must meticulously document all eligible expenditure relating to your qualifying projects. It is crucial to ensure that detailed records of these costs are maintained.
Step 3. (Claim Preparation) – Now, you should prepare the claim. In addition to cost details, HMRC requires an additional information form, which should detail the work undertaken and demonstrate why the projects qualify for research and development expenditure credit.
Step 4. (Submission) – Finally, you will submit the claim for evaluation and processing.
Who can claim R&D tax relief?
To make an R&D tax relief claim, you must be a UK-registered business that is liable for corporation tax. However, it is essential to consider all other factors relating to your company’s activities, such as the specific eligibility criteria for R&D tax relief, as they may vary depending on the size, nature and research and development activities your business undertakes.
This is why it is strongly advised that you talk to a tax professional such as Spotlight Accounting, who can ensure you meet all the relevant criteria.
Our research and development tax service
Spotlight Accounting’s research and development services deal with the entire process on your behalf. Our tax team are here to help with the following:
R&D Eligibility Assessment
We begin by evaluating your projects to determine their eligibility for R&D Tax Credits. Our experts will analyse your activities, costs, and documentation to identify any qualifying projects.
Once eligibility has been established, we will prepare and submit your R&D Tax Credit claim on your behalf. Our team will ensure that all necessary documentation is accurate and complete.
Technical Report Development
A well-structured technical report is essential for a successful claim. We will help you create a robust technical report that outlines your R&D activities and expenditures in a clear and compelling manner.
Submission and Compliance
We handle the entire submission process, including any interactions with HMRC. We make sure your claim is compliant with HMRC guidelines, thus reducing the risk of delays or rejections.
R&D Tax Credits are an ongoing opportunity. We provide continuous support, helping you identify and claim eligible R&D expenses year after year.
Claim your R&D tax relief with Spotlight Accounting today
If you are ready to unlock the potential of R&D tax relief within your business to help supercharge your innovation and growth, contact Spotlight Accounting today. Our team are ready to give expert advice to help you achieve the potential of your business.
Our services are designed to help you maximise the tax credit available to your business and deal with the whole process on your behalf, freeing you to focus on what you do best – innovating and growing your business.
Contact us now to schedule a consultation or learn more about our Research and Development Tax Services.
Book a Call with Carrie
Webinar: 30+ ways to extract Value from your Business
You can watch a webinar we did by entering your details below.