If your business is based in the UK and invests in the research and development of products or services, it’s extremely likely to be eligible for tax credits.
But how do you apply? How long does it take to receive the credits back? And how can you be sure that you are eligible?
Here are a few things you should know about R&D tax credits.
How can I find out if my company is eligible for R&D tax credits?
HMRC’s eligibility criteria for R&D tax credits is somewhat broad. Put simply, the project must tick each of the following boxes:
- Investigated potential advancements in science or technology
- Overcome an element of uncertainty
- It couldn’t be easily solved by a professional in your industry
Note: Failed R&D projects are also eligible for tax relief. HMRC does not specify at any stage that the project has to be commercially successful. Furthermore, your business can claim for R&D projects carried out on behalf of a client, as well as your own tasks.
75% of our clients didn’t even know that R&D Tax credits existed before working with Kene Partners. By offsetting costs and profits derived from R&D projects, your business can benefit from significant tax savings.
How long does it take to receive R&D tax credit?
The HMRC targets a 28-day turnaround for payment to be made once an application has been filed, though it could be faster depending on the details of the claim.
How will I receive my R&D tax credit?
Once the HMRC has processed the claim and worked out how much R&D tax credit your business is due, the money will be paid into your company accounts, simple.
Why are tax credits provided to businesses investing in research and development?
The government wants the British economy to benefit from advancements in science and technology to ensure its long-term growth and innovation.
R&D tax relief has been critical to the success of businesses driving innovation as international studies confirm that tax credits stimulate around 0.3 to 3.0 times their value in R&D development.
Effectively showing that the money returned to businesses is once more invested in innovation and developments.