R&D Tax Reliefs, are among the most significant tax breaks available to UK companies in 2021.
The value of an R&D Tax Credit will naturally vary depending on the project and claim, but is typically worth around 21.5% of qualifying spend on R&D since changes to the scheme were introduced in 2023.
Does it vary by scheme?
There are two R&D Tax Credit schemes that are currently available to UK companies.
The SME scheme offers a more generous net effective tax relief of around 21.5% of qualifying costs.
The second scheme is the Research and Development Expenditure Credit (RDEC). This applies to larger companies that fall outside of the SME definition set above. The RDEC scheme offers an effective Corporation Tax rate of 20%.
What can I claim R&D tax credits on?
To qualify for R&D Tax Credits, your project must qualify as R&D in accordance with HMRC’s definition.
This means your project must:
- Attempt to achieve an appreciable improvement in science and technology and;
- Attempt to overcome technological or scientific uncertainty.
For industry specific examples of what this means, there are over 50 detailed case studies available to read in our Case Study Guide, including what the companies did, what type of business they are, and how much they saved.
What is the claims process like?
The R&D tax claims process includes the following steps:
- Determine eligibility of your project for R&D tax credits
- Consult technical experts to obtain qualifying information
- Develop narrative explaining why the work qualifies for relief
- Obtain all qualifying financial costs
- Prepare supporting documentation
- Submit to HMRC
How can Radius help?
The Radius team are qualified and experienced experts in R&D tax credit claims. We aim to make the claim process as simple as possible for you and your team, while ensuring you take every opportunity to maximise the value of the claim itself.
We will also ensure that your claim is as robust and compliant as possible. Our team includes a former HMRC R&D tax inspector, who closely reviews every claim prior to submission. None of the thousands of claims submitted by Radius has ever been amended by HMRC because of an enquiry.
For more information on claiming, you can contact us for a free consultation, or download our free R&D Eligibility Checklist now.
What should I read next?
Our blog is full of helpful guidance, case studies and more important information relating to innovation taxes, including R&D Tax Credits and Patent Box.
