Tax Credits from HMRC

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
  • Software
  • Materials
  • 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 martin.bender@easyrnd.co.uk or on 07976 413483.