menu

Reduce the cost of innovation

R&D tax credits can deliver tax relief on up to £230 for every £100 spent on research and development.

Reduce the cost of innovation

Supporting your claim

Safeguard the success of your claim with our detailed report which explains to HMRC how the claim was calculated and why the relief is due.

Supporting your claim

The bigger picture

Reduce the cost of your innovations by combining our advice on R&D and patent box tax reliefs.

The bigger picture

Research and development relief (R&D) and tax credits

R&D tax credits are potentially the single most valuable way the Government subsidises UK companies. It can deliver tax relief on up to £230 for every £100 spent on research and development.

The relief is administered by HMRC and is designed to encourage innovation by helping companies recover part of the development costs for new products, processes, devices, materials and services. The amount you can claim depends on the size of your organisation. Typically, claims are worth tens of thousands of pounds to UK companies.

How much R&D relief can you claim?

The size of your R&D tax credit claim depends on the size of your company.

Small and medium sized enterprises (SMEs)

A company is classed as an SME if it has less than 500 staff and either a turnover not exceeding €100 million or gross assets of less than €86 million.

An SME can claim tax relief on up to £230 for every £100 spent on research and development
If a small business is in profit, its R&D tax claim can be used to reduce its corporate tax liability. If it has made a loss, it can choose to carry the loss forward to offset future profits or receive a R&D tax credit payout to boost its cash flow.

An SME claim could fall under the large company threshold if it’s impacted by other significant factors such as:

  • Grants or subsidies related to the R&D project;
  • R&D subcontracted by a large company;
  • If your SME is a ‘linked’ or a ‘partnered’ enterprise, for example where at least 25% of company shares and voting rights are held by another entity.

Large companies

A company is classed as large if it exceeds any of the SME thresholds.

Large companies are able to claim Research and Development Expenditure Credits (RDEC). The credit is calculated at 11% of the company’s qualifying R&D expenditure. However, the credit is taxable.

Depending on whether the company is profit or loss making, the credit may be set against a corporation tax liability or made as a cash payment.

 

WMT can advise you on these complex rules, establish which tax treatment applies to you and ensure you get maximum R&D relief or tax credits.

How can WMT help you make the most out of R&D relief?

Calculate maximum tax credit available;

Prepare and include your R&D tax relief claim in your annual corporation tax return;

Safeguard the success of your claim by producing a detailed report for HMRC to explain how the claim was calculated and why the relief is due.
If you choose to write your own report, we can check it complies with current legislation.

Make the process quick and painless, as the claims we prepare and submit are processed by HMRC and payments issued within a matter of weeks.

If you are engaged in innovation – be it technology, engineering or manufacturing – you can gain maximum benefit from combining our R&D tax relief advice with advice on patent box relief and the preparation of your corporate tax return.

Get in touch with our tax team to find out more about how we can help you.

Get in Touch

To find out how we use and protect your personal data, please read our privacy policy

Hertfordshire office

Verulam Point
Station Way
St Albans
Hertfordshire
AL1 5HE

London office

2nd Floor
7 St John Street
London
EC1M 4AA

Hertfordshire office

+44 (0)1727 838 255

London office

+44 (0)800 158 5829

London office (WMT Hospitality Accountants)

+44 (0)20 7253 0064

Top