HMRC Research and Development tax credits

Are you trying to make improvements to your existing products or processes? If so your company could benefit from very generous tax savings or cash credits from HMRC. Research and Development (R&D) tax credits have been around since 2000 with the number of claims made increasing significantly over recent years. However, it is still widely acknowledged that many eligible companies are missing out on this very valuable relief.



Could R&D apply to your company?

It is often assumed that R&D applies only to scientific or engineering sectors, however this is not true at all. In-fact at Garbutt + Elliott, we have made claims in a variety of sectors including, but not limited to:

  • Food industry
  • Manufacturing
  • Construction
  • Finance
  • Software development
  • Farming

R&D tax reliefs could be available to you, regardless of the industry or sector you work in and missing out on them could be costing you money. The main indicators that your business could be doing R&D are as follows:

  • Have you made (or attempted to make) significant improvements to an existing product?
  • Have you made (or attempted to make) significant improvements to an existing production process e.g. improving efficiency, reducing waste?
  • Have you performed any bespoke design or engineering services for third parties?
  • Have you created a unique piece of software for your business or a third party?

It is important to point out, that there is no need for the project to be successful in order to make a claim.


What is the benefit of making a claim?

Most companies qualify under the Small and Medium Business sized Enterprise (SME) scheme. The tax benefit for SMEs is that you can claim an extra 130% deduction against your taxable profits for all your qualifying expenditure. This provides a benefit to your company as follows:

  • £24.7 of tax saved for every £100 of qualifying expenditure (for profitable companies)
  • If you are loss making in the period there is an option to surrender the losses for a cash credit of 14.5%. Depending on the amount of taxable losses available, this could generate £33.35 of cash back for every £100 of qualifying expenditure.


What next?

If you think your company is undertaking R&D, or you simply want to find out more, please get in touch and our R&D tax specialists would be happy to discuss this with you.  We are well positioned to advise and inform you, having helped our clients get over £2m in R&D tax saving/cash back in the last year alone. Furthermore, HMRC have never rejected one of our claims.