Research and Development (R & D) tax credits are a government incentive, which aim to encourage innovation across a variety of businesses. Depending on the number of working hours a company devotes to research and development, they can potentially lower their corporation tax payment or obtain a refund from HMRC.
Companies based in the United Kingdom are able to claim tax relief for their inventions if they dedicate time to developing new products/services, enhance existing ones, or expand their field’s general expertise.
R&D tax credits are available to companies in all types of industries. However, only certain companies that are subject to corporate tax are eligible to claim R&D tax credits.
It is paramount that limited companies who are making a claim, are engaged in activities that are believed to entail research and development, and that are aimed at improving science and technology.
For an experienced individual within a business, the R&D projects that are being claimed for must contain a certain degree of unpredictability. This essentially means that if the project produces questions that have individuals within the business unsure on answers, then it is a strong suggestion that the company is carrying out effective research and development activities.
If you feel your company are eligible for R&D tax credits, then consider the following questions:
Does your company create and develop new products?
Does your company create and test prototypes?
Does your company want to develop its processes?
Does anyone on your team have a scientific or technical background?