R&D tax relief explained

If you’ve invested in a project that has helped develop your business, you may be eligible for a tax rebate through Research & Development (R&D) tax relief. This is a corporation tax relief that reduces your company’s tax bill or, if you are not making profit, results in a cash rebate from HMRC. Read on for more information…

The headlines

R&D is any project that achieves an advance in overall knowledge or capability in a field of science or technology. If you have carried out a project that has helped with the development of your business, it is possible that you will be able to claim R&D tax relief. We can help you to determine whether a project does or doesn’t qualify – just get in touch and we can give you some advice. Many of our clients did not realise that they could claim back tax relief on a project they carried out until our accountancy team spotted the opportunity for them.

How much can I claim back?

You can claim up to 33.35% of your R&D spend as a cash repayment from HMRC (if your business is making a loss) or reduce your corporation tax bill by 26% of your R&D spend if you’re making profit. Wow’s R&D expert, Natalie Howarth, says “At Wow we love R&D because it is one of the few areas that HMRC are really generous!”

Does my project qualify for R&D?

Yes, if the project is an advance in science or technology which directly contributed to the growth and success of your business. If you used extra resources or put a team of employees together, then you can claim back tax relief on any expenses incurred. The project doesn’t have to be successful in order for you to make a claim – even if you start something and later abandon it, you can still make a claim (if the original project qualifies).

We’ve recently helped clients make successful claims after they completed the following projects – have you done any of the these?

• Created software to run the business more efficiently
• Developed an advanced Content Management System
• Built hardware to operate a key part of the business
• Created a platform to better use data within the business
• Developed software to ensure compliance in a heavily regulated industry

When should I claim for R&D tax relief?

You claim for your tax relief in your corporation tax return each year. The limit to claim this is two years after the end of the relevant accounting period. Claiming for R&D tax relief can be very beneficial says Natalie “For our clients, it has helped to aid cashflow, as loss-making businesses can receive R&D tax credits from HMRC and profitable businesses pay reduced corporation tax.”

For more information from HMRC on this subject, please click here

Get in touch

If you have carried out a project that you think qualifies for R&D tax relief and would like to find out whether you can make a claim, please get in touch with Natalie, Wow’s R&D Expert on 0345 201 1580 or send an email to info@thewowcompany.com