Claiming Research & Development tax relief is easier than expected

Thousands of businesses in the UK already claim tax relief for Research and Development (R&D), reliefs which were introduced by the government many years ago to incentivise companies to innovate using the tax system. Companies that are not making such claims should consider whether they are able to do so.

The relief rewards innovative companies that have sought to make an appreciable improvement in technology or science through R&D work. Advances can include modifying a manufacturing process, developing bespoke software, creating a new product, or improving an existing one. Generally speaking, making something lighter, quicker, cheaper or stronger; in general, better.

The level of relief that can be claimed by innovative companies is very generous. For example, a SME incurring £100,000 of costs on qualifying R&D activity could save almost £25,000 in corporation tax.

Providing certain time limits are not breached, it is common for companies to be able to make claims going back two financial years. As such, the relief can be particularly beneficial for innovative companies making a claim for the first time.

Directors and shareholders should ask themselves “how long would it take the business to generate sales that would earn £25,000 of extra profit?

Despite this massive relief available to innovative businesses, our experience shows it is often an overlooked area because business owners overestimate the level of innovation required to make a claim, often thinking that the activities they undertake are not innovative enough. Another common preconception is that the level of work required to put together a claim is too high.

Can we claim tax relief for R&D?

But R&D is not all rocket science and people in lab coats. In practice, all HMRC look for is an ‘appreciable’ improvement in technology or science. And although understanding the legislation and guidance surrounding the scheme is complex, the process can be very straightforward. Our Radius team was formed specifically to help innovative businesses obtain the help they need to keep innovating. And our dedicated team of professionals truly specialise in providing proactive and quality tax advice to innovative businesses and have many years’ experience of working alongside business owners, and have completed and submitted hundreds of R&D tax relief claims.

The head of our Radius team, Scott Burkinshaw, has been involved in the leadership of the R&D tax relief teams at national firms of accountants and is supported by Senior Tax Managers with many years’ experience of completing R&D tax relief claims, including experience gained within HMRC.

Our process for working with companies on their R&D claims is a simple one; one that is focused on quickly and concisely assessing a company’s potential eligibility before painlessly completing the process, ensuring that claims are compliant and maximised as far as possible.

Typically the process involves:

A short initial discussion to determine whether a claim is possible
A technical meeting to gather the information (including costs information) required to make a claim
The production of a technical report to cover the R&D activity (you will not have to spend hours and hours writing a report yourself) with submission of the claim to HMRC on your behalf

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This simple approach has proved highly successful in helping many of our innovative clients obtain millions of pounds in tax savings, with our Radius team having helped hundreds of companies of all sizes across a range of industries (from engineering and manufacturing to software developers) claim tax relief.

R&D tax relief presents an unmissable opportunity for local businesses. The government wants to see more claims being made and Shorts' Radius team are perfectly placed to help. For more details on claiming Research and Development tax relief, please do not hesitate to contact Scott Burkinshaw to arrange your free consultation.