How much is my R&D tax credit claim worth?

R&D tax relief is available to a wider range of companies than you probably think. If a company is paying people to solve technical problems then there may be scope to claim.

Expenditure incurred on staff costs (salary, employer NIC, employer pensions contributions) materials and computer software costs may qualify for a R&D claim. Eligible companies can make a claim going back two financial years, so claiming for two previous years can be particularly beneficial for first time claimants.

A company employs one person who spends 80% of his time solving technical issues. He earns a salary of £30,000. Once we include employers nic and pension contributions the the total staff cost can easily reach £35,000. As a first time R&D claimant the company can claim going back two financial years, therefore the total costs for the claim can may reach £56,000. In addition to this, other costs such as consumables, raw materials, computer software costs can still be claimed for. With this in mind it can be relatively easy to have qualifying R&D costs in the tens or hundreds of thousands of pounds.

Illustrated below are examples of how valuable an R&D claim can be for your company. (Assumes claimant company is eligible for relief under the SME Scheme)

Total Qualifying Cost (£)	Cash value of claim for a profit making company (£)	Cash value of claim for a loss making company (£)
50,000	12,350	16,675
75,000	18,525	25,013
100,000	24,700	33,350
150,000	37,050	50,025
200,000	49,400	66,700
250,000	61,750	83,375
300,000	74,100	100,050
400,000	98,800	133,400
500,000	123,500	166,750

If you are not sure whether the expenses you are incurring will qualify for an R&D tax credits claim, the please download our eligibility guide for more details.

For more details, or to speak to a member of the Shorts Radius team about your company's eligibility to claim, please do not hesitate to contact us today, and arrange for your free consultation.