Small and medium companies can claim generous tax relief on expenditure for research and development (R&D). R&D is an expensive part of business and the relief is there to recognize that innovation leads to revenue growth and profit. It can be a great help to businesses starting up:
- 100% Corporation Tax relief for SMEs for qualifying capital expenditure
- 230% Corporation Tax relief from expenditure that would normally qualify as a revenue deduction – staff costs, software, materials and subcontracted R&D costs
- A business can surrender a loss for a tax-free refund of 14.5%
R&D Tax Relief can be highly valuable to a business’s tax position, so it’s of the utmost importance that the claim is maximized and qualifies within the rules. The tricky bit lies in deciding exactly what expenditure qualifies; at what point do costs start qualifying, cease qualifying and how non-qualifying costs are dealt with.
Any company claiming R&D Tax Relief should also expect an enquiry from HMRC as it grants such generous exemptions and reliefs. Now it is commonplace to submit a report outlining the supporting calculations to protect against any future enquiry from HMRC.
At AIMS Accountants for Business, we work alongside R&D specialists who deal with the leg work for you. We’ll organise the presentation of the supporting documents to maximise your claim and ensure that HMRC sign it off.
If you are about to start a project that will extend scientific or technical knowledge, then get in touch with your local AIMS Accountant. They can take the tax headache out of your hands letting you focus on business’ research and development.