Do you pay technically skilled staff to solve scientific or technological problems?
If so, this is a good indicator that your company could be claiming support from HMRC towards these, and other associated costs, in the form of R&D tax reliefs. The relief is worth up to 25% of the qualifying cost, with cash payments available from HMRC in some cases – can you afford to miss out?
The Government recognises that innovation drives economic growth and one of the ways in which they encourage innovation is through the R&D tax credits regime. The reliefs, which were first introduced almost 20 years ago, are still widely under-claimed, even though they can be worth almost £25k in tax saved for every £100k of qualifying spend.
One of the main reasons that the relief isn’t claimed by all those who are entitled is because the level of innovation required to claim is overestimated. One simple question we often ask companies we work with when identifying potential claims is ‘Do you pay technically skilled staff to solve technical problems?’. If the answer is yes, it’s often the case that activity qualifying for R&D relief is being carried on.
The role of the skilled employee is key when considering R&D reliefs. Recognising that an essential requirement for successful R&D is the skilled individual, HMRC refers to ‘competent professional’ throughout the guidance supporting the regime. A competent professional has a track record, accumulated knowledge, skills and qualification in the specific field. The competent professional helps define the R&D project, assessing the technically challenging areas of the project. If a solution to a problem is not ‘readily deducible’ by the competent professional, then it’s likely R&D has taken place. R&D relief is available for companies across all sectors and fields of science and technology and depending on the area in which your company operates, your competent professional could be a software developer or an engineer, for example.
One other point worth bearing in mind when considering your skilled employees is ensuring you retain these skills in your business. If these skilled individuals were to leave, there could be negative impacts on the business, including taking knowledge to competitors, the cost and difficulties in replacing them and the uncertainty this creates. There are many ways in which key employees can be incentivised in a tax efficient manner, helping to lock in talent and this is something on which the Radius team liaises with the wider tax planning team at Shorts. We would be happy to discuss these issues with you.
Our checklist helps identify eligible expenditure with 11 simple questions, taking just ten minutes of your time.
Our Radius specialists focus on quickly and concisely assessing a company’s eligibility to claim Research and Development tax reliefs. They will then ensure your claim is completed as painlessly as possible, is compliant (we have a 100% success rate) and is maximised.
Our Radius team can explain how easy it is to make your company’s innovation pay.
Our team:
- Includes an ex-HMRC Inspector who specialised in reviewing and processing R&D tax relief claims – have you claim reviewed prior to submission
- Is the official R&D tax relief partner to the Sheffield, Barnsley and Rotherham and East Midlands Chambers of Commerce
- Ensures claims are prepared by true R&D tax relief specialists, not general tax advisers or accountants
- Has robust quality control procedures to ensure that claims are fully compliant
- Has never had a claim rejected by HMRC.
