The UK's Research and Development Tax Credits are a tax incentive designed to encourage companies to invest in R&D. As a business owner, and you can reduce your tax bill or claim payable cash credits as a proportion of your R&D expenditure.
The UK scheme is volume-based because the incremental approach provides a more stable funding stream for businesses whose R&D spending fluctuates or remains at a steady level (for instance during times of macroeconomic volatility).
Its possible to make a claim up to two years after the end of the relevant accounting period. After this point – you won’t be able to make a claim for R&D relief.
It is possible therefore to make an historic claim based on past qualifying expenditure by amending and resubmitting your tax return. A successful claim should result in a cash payment to your business.
You can also make an in-year claim or by providing the required information along with your original tax return. Relief is given in the form of a reduced tax bill, as opposed to a cash payment, assuming you are profit-making.
Often overlooked by UK companies, R&D tax relief can offer significant corporation tax savings on eligible expenditures. If your company is developing new products or improving its products or processes in some way, then this may qualify for HMRC R&D tax credits.
There is scope for making an R&D claim in any sector. Our R&D tax consultants can help you make the most of research and development tax credits.
ETC Tax are experienced in handling client’s claims from start to finish. If you wish to make a Research and Development Tax Credits claim, please get in touch with one of our Tax Specialists.
