What is R&D?
R&D has a specific definition for tax purposes. If a company is seeking to make a product or process better than the original (in a scientific or technological way), then as long as the project wasn’t straightforward, it is likely that R&D has taken place.
What is R&D tax relief?
R&D tax relief allows companies to claim a ‘super’ tax deduction where they are undertaking R&D activities. If a company is loss making, it can also claim a tax repayment from HMRC.
How much is the relief worth?
There are several different R&D reliefs available, but the tax savings are generally:
- for SMEs – £25 for every £100 spent on R&D; and
- for large companies – £11 for every £100 spent on R&D.
For loss-making SMEs, a tax repayment of £33 for every £100 spent on R&D could also be due.
HMRC are inundated with R&D claims, and at UHY we take the time to develop claims that meet their expectations. So far, we have been responsible for a significant number of successful claims.