Are you making full use of the generous R&D relief scheme?
Hundreds of businesses across the UK enjoy tax relief totalling millions of pounds thanks to the Government’s generous R&D relief scheme.
Last year nearly 40,000 claims were made for Research and Development (R&D) tax credits in the UK, almost double the amount made in the previous year.
Businesses both large and small benefited from £3.5 billion in tax relief during the same period in 2018 from the often-neglected tax credit, which helped contribute towards £24.9 billion of R&D expenditure across the nation.
However, many more businesses are potentially missing out.
Many smaller businesses can benefit from the small and medium-sized enterprise (SME) R&D relief, which is available to businesses with fewer than 500 staff or a turnover below £87 million.
This allows small businesses to deduct an extra 130 per cent of their qualifying R&D costs from their yearly profits, as well as the normal 100 per cent deduction, to make a total 230 per cent deduction – which equates to an additional 33p for every £1 spent on R&D.
However, businesses that want to take advantage of this need to meet certain eligibility criteria.
In order for a project to be eligible for R&D relief, it must have involved a search for an advance in science and technology or tried to overcome uncertainty using a method or procedure which couldn’t be easily worked out by a professional in the field.
Larger businesses can also benefit from Research and Development Expenditure Credit, which is worth 12 per cent of a company’s qualifying R&D expenditure and is offset against a person’s tax liability or, in some circumstances, is payable in cash.
The credit is taxable at the normal Corporation Tax rate, which effectively means the benefit is worth 10p for every £1 you spend on qualifying R&D.
Naturally, the rules surrounding all types of R&D tax credits are complex and some businesses may find the criteria governing what is and is not eligible confusing.
With this in mind, it is always wise for firms to seek specialist advice, as it may be possible to obtain confirmation of the relief prior to major investment in a project.
- Spring Statement 2019
- National Living Wage to rise next month
- Are you making full use of the generous R&D relief scheme?
- Tribunal finds in favour of Middlesbrough FC in low pay claim
- Make the grandest romantic gesture and reduce your tax bill
- New advisory fuel rates for company car users
- Delay in issuing Self-Assessment penalty notifications
- Making Tax Digital productivity boost expected to be worth billions to UK SMEs
- Automatic Enrolment contributions to increase
- HM Revenue & Customs drops insistence that all company directors must submit tax returns
- Late payers to be flagged up to businesses under new proposals
- Just over half of businesses are prepared for Making Tax Digital
- Entrepreneurs’ Relief changes fail to meet up to the test
- Payroll sector prepares for key changes in 2019/20
- Taxpayers treated unfairly by HMRC, says House of Lords report
- Taxpayers offered online tool to assess their self-assessment requirement
- Tax rates rise twice as fast in the UK than the international average
- An end to the Entrepreneurs’ Relief ‘dilutions dilemma’?
- Brexit uncertainty sends small business confidence to a seven-year low
- Debt recovery costs small businesses an average of £9,000
- Smaller estates should not have to file IHT paperwork, says Office for Tax Simplification
- Big increase in P2P lending
- 180,500 first-time buyers benefit from relief on Stamp Duty Land Tax (SDLT)
- Italian e-invoicing requirements make Making Tax Digital look like a walk in the park
- House of Lords calls for a delay to Making Tax Digital
- UK takes second spot for tax compliance in G20
- Unwrapping Christmas tax gifts
- National Living Wage to rise in April 2019
- Entrepreneurs’ Relief rules to be tightened
- Research reveals Inheritance Tax hotspots across the UK
- R&D Tax Credit system to be reviewed in light of fraudulent claims
- HM Revenue & Customs to review and rework some 2016-17 self-assessment tax returns following error
- Payee names to be required for bank transfers in effort to combat fraud and errors
- Public pilot of Making Tax Digital for VAT opens
- Autumn Budget 2018
- Budget date 2018 announced, with half the usual notice
- Employment claims from contractors brought within IR35 expected after HMRC settlement
- Just eight per cent of business loan applications successful with one high street bank
- Government backed tax-free savings plan to help savers earn 50p on every £1
- HMRC investigates estate valuations as part of IHT campaign
- Micro businesses bear the brunt of late payments
- HMRC finally launches MTD communications plan and simplified guidance
- Workers miss out on £15.6 million in pay through minimum wage breaches
- CIOT reports increase in R40 refund errors
- Property investments once again hit by new tax rules
- HMRC releases new advisory fuel rates for company car users
- One in ten small businesses are concerned about business failure
- A quick guide to the new penalties for late MTD filing and payments
- Regulator tells banks to stop victim-blaming
- Working 9 to 5? It’s an unusual way to make a living
- Finance Bill shrinks in the parliamentary wash-up as PM announces snap election
- New civil penalty notices are now in effect for residential landlords
- A furnished holiday letting won’t just give your customers much needed relief
- P11D dispensations have been dispensed with
- Online VAT fraud and error costing UK dear
- HMRC issuing hefty fines to eBay and Amazon traders who fail to pay tax
- HMRC goes “nuclear” in pursuit of unpaid taxes
- Could you benefit from Tax-Free Childcare?
- Give your business’ finances a spring clean
- Does Annual Tax on Enveloped Dwellings (ATED) apply to you?
- Businesses are more buoyant, says the Bank of England
- Record number of employers underpaying workers
- Cash basis accounting for landlords
- Trivial in name only – do you know the rules on trivial benefits in kind?
- Warning over unexpected late payment notices in relation to now-liquidated companies
- Small businesses see changes to the VAT Flat Rate Scheme
- Spring Budget 2017
- The Restaurant Show: Preview
- Pub 16
- HMRC enquiries
- The Restaurant Show: What does it have to do with pubs?
- Private investment in pubs
- Summer Budget Statement 2015
- Miller Magic!
- Retail Rate relief scheme
- If you’re an employer, you should read this
- Pensions Auto Enrolment: All employers must read this…