What Are R&D Tax Credits?
Research and Development (R&D) tax relief is a government incentive designed to encourage UK companies to invest in innovation. Here are the key points:
Eligibility: R&D tax reliefs support companies working on innovative projects in science and technology. To qualify, your activity must be recognised as a scientific or technological innovation and not already conducted elsewhere. Certain sectors, like arts, humanities, and social sciences, are ineligible.
Types of Relief:
- SME R&D Tax Relief: Small and medium-sized enterprises (SMEs) can deduct an extra 86% of their qualifying costs (in addition to the normal 100% deduction) from their yearly profit. If your company is making a loss, you can also claim a payable credit.
- R&D Expenditure Credit (RDEC): Larger companies can claim an RDEC, which provides a credit against their corporation tax liability.
R&D tax relief is a government incentive that encourages innovative businesses to take financial risks in projects where there are uncertain goals. Qualifying costs can include:
- Staff wages (including directors).
- Payments to subcontractors and freelancers.
- Consumables like water, fuel, and power.
Our process
- Check Eligibility: Determine if your work qualifies as R&D and explore the different reliefs available. This is typically during a face to face meeting, or over a Teams video call. We really need to get into the detail of it all, and so typically this will involve discussions with the experts completing the work alongside the management team providing the direction.
- The numbers: On conclusion of the meeting, we request copies of the accounts and supporting information to calculate the value of the claim. We are fully transparent with our fees, and we highlight our fees based on the value of the claim.
- The report: Once the numbers are agreed, we work with your technical experts to write up a detailed report to submit to HMRC alongside your tax return.
- Notify HMRC: For accounting periods starting after 1 April 2023, inform HMRC if you plan to claim R&D tax relief.
- Submit Detailed Information: From 8 August 2023, complete an additional information form to support your claim.
- Submit the return & wait for your tax credit: Potentially up to 33p in every £1 of the costs you incurred in the activity prior to April 2023 and up to 27p in every £1 after that point (RDEC claims are structured differently and have a different rate of return).
Testimonials
What our clients say about us
Mike Perry
The whole team are incredibly helpful and great at what they do. I can't recommend them enough!
Malia Brown
Thank you to [The Phinch] team for all your support over the years. It's very much appreciated and valued.
Grace Eden
Excellent guidance through process with a high degree of expertise. A very smooth experience.
Jennifer Muller
I have used [Phinch] services for many years. [The] team have guided me through the complicated processes of US taxes as an expat, and stayed on top of any changes in filing rules. Highly recommended.
Larissa Bulla
[The Phinch] team have been incredibly helpful in the preparation and filing of my US tax returns and FBAR submissions, even when I have been less than fully organised. The team are always prompt and professional. They stay abreast of changes in annual tax rulings and have helped me secure rebates or stimulus payments where these are due. I highly recommend this company.