Research and Development Tax Credits

Research and Development Tax Credits (R&D Tax Credits) is a tax incentive put in place by the UK Government back in 2000. The purpose of Research and Development Tax Credits is to encourage companies to innovate and grow, which the Government believes is advantageous for the UK economy. 

However, recent HMRC statistics have shown that many UK businesses may be missing out on R&D Tax Relief.

If your organisation interested in claiming R&D Tax Credits, our expert team can assist. 

The rate of R&D tax credit which can be claimed depends upon the accounting period to which it relates. For accounting periods from 1 April 2024 a new merged scheme was introduced, although for prior accounting periods, two sperate schemes still exist.

There are two different types of R&D tax relief schemes for these periods. These depend on the size of the company and whether the project has been subcontracted to you or is subsidised (or both).

SME R&D tax relief is available for small to medium enterprises which have less than 500 staff and a turnover of under 100 million euros (or a balance sheet total under 86 million euros).

Partner and linked enterprises will need to be included when calculating if a business is a SME.

Here, for qualifying expenditure incurred on or after 1 April 2023, a higher 14.5% tax credit rate can be claimed. This is when a firm meets the intensity condition (an R&D intensity of at least 40%).

Expenditure credit can be claimed by large companies working on R&D projects.

Additionally, this can be claimed by SMEs, where they have been subcontracted to do R&D work by a large company or alternatively, where they have subsidised expenditure.

There is now one merged scheme for companies of all sizes. There is also an additional scheme which provides a more generous basis of calculation. This is only available for loss-making R&D intensive SMEs.

The expenditure rules are identical for both types of relief. Where work is carried out under contract, the party initiating the research and development project is typically the party able to claim.

A company of any size which is undertaking qualifying R&D is able to claim via the merged scheme.

This is calculated in the same way as the SME scheme that existed before 01.04.2024.

A firm can claim enhanced R&D intensive support if the following are true: 

The same expenditure rules are valid as for the merged scheme.

Alexander & Co work on a contingency fee basis (though fixed fee can also be quoted for if required). All initial R&D consultations are free of charge. Therefore, we only charge if HMRC accepts the claim and you get a repayment/reduction in your liability. The claim is prepared by a Chartered Tax Advisor. The claim should only take two to three hours of your time – we do all the work for you. For more information, contact our R&D Tax Credit specialists. Our fees are some of the most competitive in the industry and are always contingent on a claim being successful.

A common misconception is that R&D tax relief only applies to science and technology companies. However, there are a whole host of industries who can reap the benefits from R&D Tax Credits, from the hospitality industry to property. To qualify, you must be a business that:

Your R&D project does not need to be unique and does not need to succeed. Examples of R&D projects where we have successfully assisted our clients include:

These are just a few examples of the many claims we have undertaken. Also note that claims are available where R&D has been subcontracted out to another party. For more information, please contact us.

Our specialist, in-house R&D tax relief specialists can support you with your claim. This will greatly assist, as claiming yourself can be a complicated and prolonged endeavour. We can assist you with claims for the past two accounting periods. This can often result in a large sum of corporation tax repaid or R&D tax credits.

It’s important to find out if you are eligible to make a claim immediately. This is because you do not want to miss any deadlines and potentially lose out on significant credits. For more information, contact our friendly and professional team today. Please call us on 0161 832 4841, email info@alexander.co.uk or fill out the form below and we’ll be in touch shortly.