What are R&D tax credits?

Very simply it is a tax incentive from the government to encourage research and development (R&D), or what you and I might call ‘innovation’, by UK companies. But ‘innovation’ here doesn’t mean you need to be wearing a lab coat - actually, innovation in many ways is actually about improving and developing your business.

The idea is that companies need to innovate to grow and this is good for both the company and the economy.

In order to benefit from this incentive, you need to provide extra information in your company’s tax return, a breakdown of R&D expenditure information, and a written technical report.

If this sounds scary or complicated, don’t worry! Claimer makes the process quick, simple and inexpensive, and we’re here to guide you every step of the way.

How much can I claim back?

Under the scheme, you can claim up to 33% of your costs related to the innovative activities your business has undertaken. The average claim according to the latest figures is over £80,000 in London (and over £50,000 in the rest of the UK).

Eligibility Checklist

Most companies we find are eligible, so if you’re unsure let’s have a chat. But just so you know what the official eligibility criteria are - have a read of the below. Your company must:

  1. Be a UK company subject to Corporation Tax. This would include limited companies, but not for example partnerships.
  2. Be a going concern. This means that your company can afford to pay its bills over the foreseeable future.
  3. Not be in administration or liquidation.
  4. Be undertaking R&D activities that qualify under the scheme, i.e. been doing something innovative.
  5. Have spent money on these R&D activities.

To note, there are other criteria that will impact your eligibility and the amount you can claim including grants and subcontracting. When preparing your claim, we will look into whether any of these impact your claim.

What types of activity qualify for R&D tax credits?

The reality is that businesses have to be innovative to stay ahead of the competition - for example by coming up with improvements and enhancements to their services or products. Often lots of development work also takes place when initially launching a business, especially when it looks to disrupt an existing market with something new.

Whether you are innovating on an existing product or service, or developing something entirely new, it’s highly likely that it involves some activities which qualify for R&D tax credits.

What next and how do I get started?

We haven’t really gone into the nitty-gritty of the scheme, but hopefully, this acts as a helpful overview.

The Claimer team is well versed in the kinds of activities that qualify - and is also very friendly - so if you have any questions, feel free to pop us a message on the live chat (bottom right), or send us an email using [email protected].

If you’d like to jump straight in, Claimer also has an eligibility quiz, which when passed, will guide you through the process of making a claim.