R&D tax credits are designed to encourage and incentivise UK Limited companies to develop new products and technologies.
To qualify for an R&D claim you need to be –
There is a 2-year opportunity after company year-end to file an R&D claim (12-months after the annual filing deadline).
There are two R&D schemes in operation –
1) SME scheme is for businesses under
If you qualify for the SME R&D scheme you could get –
An additional 130% tax relief on qualifying expenditure
Convert that into a 14.5% surrender-able loss if you have insufficient taxable profit and would like the cash back.
2) Larger businesses over the SME criteria can claim R&D tax credits under the RDEC scheme.
The RDEC scheme is less generous allowing the company to only claim an additional 13% of the qualifying R&D expenditure.
Also some smaller businesses can come under the RDEC scheme depending on their trading circumstances.
R&D tax credits have been processed and paid out within 4 weeks but it is worthwhile noting there is no time limit on HMRC enquires which could look into a claim years after it has been paid out.
But providing your claim is based on solid grounds and is supported by solid records you shouldn’t have a problem.
If you would like a free no obligation discussion to see if one of your projects could qualify for R&D tax credits, please contact us.