Research & Development
Research & Development – Tax Credits for SMEs – Money back for investing in innovation
Research and Development (R&D) Tax Credits are Government tax breaks designed to encourage innovation by incentivising companies to invest in R&D, enabling them to reduce their tax bill or claim payable credits on a proportion of their R&D expenditure.
- 26% Tax Reduction for profitable Companies (25% for expenditure prior to 1 April 2015)
- 33% Cash Back for loss making companies
R&D Tax Credits - How it works
R&D for tax purposes takes place when a project seeks to achieve an advance in science or technology. Eligibility is not limited to activities taking place in laboratories and science based research centres. R&D tax credits can often be claimed in far broader areas and various enterprises could qualify for significant tax reductions and gain a cash flow boost. Loss making companies can even claim back tax they haven’t paid in the first place.
What's it worth?
- Up to 26% tax reduction for profitable companies - that’s the equivalent of 26p from HMRC for every £1 spent on R&D activities
- Up to 33.35% cash back for loss making companies - an increased rate from April 2014
Expenditure includes:
- Staff costs of those working on a project, subcontractor costs (65% allowable), and certain other overhead expenses.
- Developing new or improved products, processes, services or systems.
Beavis Morgan - specialists in working with owner-managed businesses and entrepreneurial thinkers
At Beavis Morgan, we have made substantial successful claims for business across a range of sectors.
- Discussing underlying concept or technology and getting to know your innovation in detail
- Extracting the relevant financial information to compile robust claims which we present to HMRC
- Liaising with HMRC on your behalf to assist in the process of achieving R&D money back for you and your business
Below is a sample of examples where we have successfully helped businesses achieve tax breaks for investing in R&D:
| Business | Project | Tax Benefit £ |
| Advertising Agency | Technical innovation in digital marketing | 113,000 |
| Digital Marketing | Innovative technology platform to facilitate project development | 24,000 |
| Game Developer | Development of 3D action games for mobile and tablet devices and other digital applications | 129,000 |
| Marketing & Communications | Digital database used for business development support | 58,000 |
| Travel Agency | Development of suite of virtual corporate travel tools | 161,000 |
| Lighting Products | Development of lighting concepts using 3D digital imaging software | 26,000 |
| Property Consultancy | Project collaboration tool for construction and property portfolio industries | 68,000 |
Our specialist team at Beavis Morgan can help you with all aspects of your R&D tax credit claim, including:
- Ascertaining whether you are eligible to qualify
- Identifying and capturing expenditure on qualifying activities
- Preparing a robust report for submission to HMRC
- Being prepared for and managing an audit by HMRC
Speak to us today to find out how you can benefit from the R&D tax credits - but remember the 2 year time limit.
