An introduction to R&D tax credits by Easy R&D.
The (research and development) R&D tax credits scheme is a government incentive to encourage scientific and technological innovation. By investing in eligible R&D, your membership body, trade association, and your members are entitled to tax credits from HMRC in the form of a lump sum or reduced Corporation Tax bill — sometimes even to zero.
The stereotypical image of R&D sits with scientists in white lab coats and geeky techies, but that couldn’t be further from the truth. Businesses in absolutely any industry can claim up to 33% of costs — and possibly yours.
£33 of every £100 claimable
£54,000 average client claim
£63m awarded to clients since inception
Some essential criteria for claiming
Your business will need to be:
- A limited company in the UK that’s subject to corporation tax
- A company with fewer than 500 staff and a turnover of less than €100 million, or gross assets of less than €86 million
If your business is larger, then Easy R&D can help you claim under the RDEC scheme.
What counts as R&D?
The government’s criteria for claiming are purposefully broad.
To qualify, you’ll need to have:
- Made a scientific or technological advance
- Resolved a scientific or technological uncertainty
— or at least attempted. Failed projects can qualify — providing the intention was there.
Creative thinking alone doesn’t qualify, e.g. a new logo or a marketing strategy, but it doesn’t have to be rocket science either.
Eligible R&D activity is likely to include:
- Creating new products, processes, software, or services
- Appreciably improving products, processes, software, or services
Typical qualifying costs
- Direct staff costs
- Clinical trials
- Contributions to independenet research
- Externally provided workers
- Light, heat, power, and other utility costs
Why aren’t more companies claiming?
Too many SMEs are still drastically underclaiming the R&D tax credits they’re due.
Some aren’t even claiming at all, with the main reasons being:
- They’ve never heard of the R&D tax credits scheme (it’s been around since 2000)
- If they have, they think it’s just for geeky techies and scientists in white lab coats (it really isn’t)
- They fear it’s a tax dodge (it’s a fully approved government scheme)
- They don’t believe the work they do qualifies as R&D (what qualifies may surprise you)
They’re put off by the complexity and time it takes to submit a claim (that’s where Easy R&D comes in)
Why does the government do it?
R&D tax credits are a win-win for both your business and the British government.
The scheme works at reducing the figure of 90% of businesses failing in the first five years.
- Better survival and more growth = more taxes and a boosted economy
The government’s return on investment (ROI) is around 2.5 for every £1 spent on the scheme.
Tempted to claim yourself or ask your accountant to do it for you?
The work that goes into making a claim isn’t straightforward. If you get a claim wrong, HMRC could hoist a red flag next to your company and charge a penalty. If HMRC deems that you got it wrong on purpose, the financial and reputational implications could be huge.
Easy R&D’s expert consultants, qualified accountants, meticulous report writers, and robust processes ensure no qualifying costs go a miss.
What you’ll get from Easy R&D
Easy R&D will present to HMRC a robust claim that explains how:
- You looked for an advance in science or technology
- You had to overcome a scientific or technological uncertainty
- You tried to overcome this uncertainty
- The uncertainty couldn’t be easily worked out by a professional in the field
- You sought an advance in expertise within your industry as a whole and not just your company
Averaging £54,000 per claim, Easy R&D provides an end-to-end service, and your relationship won’t end once HMRC has paid you. Easy R&D will undertake a meticulous ongoing study of your business to ensure you receive maximum return in tax credits — year in, year out.
By partnering with Easy R&D, you’ll end up with more money in your business’s bank account due to how they maximise claims. Easy R&D’s experts carry out all work that goes into claiming so that you don’t have to — leaving you free to get back to doing what you do best.
What Easy R&D will need from you
Five to six hours of your time: a small investment in return for a potentially substantial reward.
Easy R&D’s fees
Easy R&D’s fee depends on a successful claim, i.e. if HMRC doesn’t pay out, there will be no charge to you. Even though you pay Easy R&D a fee, you’ll end up with more money due to how they maximise claims.
Get in touch
If you don’t think that you qualify for R&D tax credits, then you could be wrong.
If you do think you qualify for tax credits, then you could be right.
Contact Easy R&D today, and find out for sure.
This is a good tax. Who would’ve thought it?
For more information, please contact Easy R&D’s Head of Partnerships, Martin Bender, at firstname.lastname@example.org or on 07976 413483.