An introduction to R&D tax credits by Easy R&D.
The (research and development) R&D tax credits scheme is a government incentive to encourage scientific and technological innovation. By investing in eligible R&D, your membership body, trade association, and your members are entitled to tax credits from HMRC in the form of a lump sum or reduced Corporation Tax bill — sometimes even to zero.
The stereotypical image of R&D sits with scientists in white lab coats and geeky techies, but that couldn’t be further from the truth. Businesses in absolutely any industry can claim up to 33% of costs — and possibly yours.
£33 of every £100 claimable
£54,000 average client claim
£63m awarded to clients since inception
Some essential criteria for claiming
Your business will need to be:
A limited company in the UK that’s subject to corporation tax
A company with fewer than 500 staff and a turnover of less than €100 million, or gross assets of less than €86 million
If your business is larger, then Easy R&D can help you claim under the RDEC scheme.
What counts as R&D?
The government’s criteria for claiming are purposefully broad.
To qualify, you’ll need to have:
Made a scientific or technological advance
Resolved a scientific or technological uncertainty
— or at least attempted. Failed projects can qualify — providing the intention was there.
Creative thinking alone doesn’t qualify, e.g. a new logo or a marketing strategy, but it doesn’t have to be rocket science either.
Eligible R&D activity is likely to include:
Creating new products, processes, software, or services
Appreciably improving products, processes, software, or services
Typical qualifying costs
Direct staff costs
Contributions to independent research
Externally provided workers
Light, heat, power, and other utility costs
Why aren’t more companies claiming?
Too many SMEs are still drastically under-claiming the R&D tax credits they’re due. Some aren’t even claiming at all, with the main reasons being:
They’ve never heard of the R&D tax credits scheme (it’s been around since 2000)
If they have, they think it’s just for geeky techies and scientists in white lab coats (it really isn’t)
They fear it’s a tax dodge (it’s a fully approved government scheme)
They don’t believe the work they do qualifies as R&D (what qualifies may surprise you)
They’re put off by the complexity and time it takes to submit a claim (that’s where Easy R&D comes in)
Why does the government do it?
R&D tax credits are a win-win for both your business and the British government.
The scheme works at reducing the figure of 90% of businesses failing in the first five years.
Better survival and more growth = more taxes and a boosted economy
The government’s return on investment (ROI) is around 2.5 for every £1 spent on the scheme.
Tempted to claim yourself or ask your accountant to do it for you?
The work that goes into making a claim isn’t straightforward. If you get a claim wrong, HMRC could hoist a red flag next to your company and charge a penalty. If HMRC deems that you got it wrong on purpose, the financial and reputational implications could be huge.
Easy R&D’s expert consultants, qualified accountants, meticulous report writers, and robust processes ensure no qualifying costs go a miss.
What you’ll get from Easy R&D
Easy R&D will present to HMRC a robust claim that explains how:
You looked for an advance in science or technology
You had to overcome a scientific or technological uncertainty
You tried to overcome this uncertainty
The uncertainty couldn’t be easily worked out by a professional in the field
You sought an advance in expertise within your industry as a whole and not just your company
Averaging £54,000 per claim, Easy R&D provides an end-to-end service, and your relationship won’t end once HMRC has paid you. Easy R&D will undertake a meticulous ongoing study of your business to ensure you receive maximum return in tax credits — year in, year out.
By partnering with Easy R&D, you’ll end up with more money in your business’s bank account due to how they maximise claims. Easy R&D’s experts carry out all work that goes into claiming so that you don’t have to — leaving you free to get back to doing what you do best.
What Easy R&D will need from you
Five to six hours of your time: a small investment in return for a potentially substantial reward.
Easy R&D’s fees
Easy R&D’s fee depends on a successful claim, i.e. if HMRC doesn’t pay out, there will be no charge to you. Even though you pay Easy R&D a fee, you’ll end up with more money due to how they maximise claims.
Get in touch
If you don’t think that you qualify for R&D tax credits, then you could be wrong.
If you do think you qualify for tax credits, then you could be right.
Contact Easy R&D today, and find out for sure.
This is a good tax. Who would’ve thought it?
For more information, please contact Easy R&D’s Head of Partnerships, Martin Bender, at email@example.com or on 07976 413483.