R&D Tax Relief: 5 Steps to a Successful Claim

When looking at R&D Tax relief, the process of making a successful claim can be difficult, particularly when navigating HMRC’s submission requirements; it is vital to find the right balance between maximising a claim whilst adhering to the complex legislation and rules.

R&D tax relief is the generous government-backed scheme that rewards innovative businesses seeking to make an ‘appreciable’ advance in technology or science, with almost £25,000 of tax savings for every £100,000 spent on doing so.

Here at Shorts’ Innovation Taxes Group our team of specialists have extensive experience of making numerous positive R&D claims for our clients and we are pleased to provide this 5-step guide to making a successful claim:

Firstly, determine whether your company is eligible to qualify for R&D tax relief, identifying the relevant individual projects in which an advance in technology has been sought requiring scientific or technological uncertainties to be overcome, before presenting a summary of that activity in line with HMRC’s guidance. For a comprehensive list of criteria, download our R&D Tax Credits eligibility checklist. It will take you less than 10 minutes to determine whether or not you can claim.

2. Collate the qualifying costs, ensuring that they reflect the level of work that was put into the qualifying activity, ensuring that only the applicable and allowable costs are claimed, and that the various rules surrounding such areas as subcontractor costs are applied correctly.

3. Keep a good record of the R&D activity itself and the costs information. In the event of an enquiry into your claim from HMRC, this will help present a strong case to an inspector.

4. Make sure that a claim is made through the right scheme: either the SME or the RDEC schemes. Factors such as the size of a company and whether its R&D activity has been grant funded can affect this. Depending on the company’s circumstances, some claims can be split between the two schemes.

5. Bring all of the above information – technical and costs information, and compliance summary – together in a suitable format for submission to HMRC – usually in the form of a report which can be sent to the specialist national HMRC R&D unit.

Without a fundamental knowledge of the above areas and, especially the relevant legislation, however, putting together a successful claim for R&D can for many businesses be a time consuming and off-putting process.

Shorts’ Innovation Taxes Group can help. Through our simple and unburdening approach to preparing R&D claims, we have helped hundreds of companies make a successful claim and between them obtain millions of pounds in tax savings through this relief. We manage the process, working to collate the information, ensure that the claim is as robust as possible (whilst still being maximised) before submitting them to HMRC on the company’s behalf.

If you would like to find out more about your business could look to make a successful claim, please do not hesitate to contact us.