R&D Tax Credit Claims

R&D Tax Credits are a tax incentive from the UK Government, designed to encourage companies to invest in R&D. The scheme has been around since 2000 and last year over 48,000 UK companies claimed almost £4.3bn in tax relief. R&D tax relief can be used to reduce your tax bill or paid in the form of cash credits for loss-making companies. Many businesses don’t even realise they have a claim, such is the complexity of making a claim or even understanding what qualifies as R&D.

Working in partnership with the UK’s leading company for processing these claims, we can help you, free-of-charge, find out if your company is indeed both eligible for a claim and how much this will be. Furthermore, we don’t charge you a penny unless we are successful in getting a claim paid out, which at this point, we take a pre-agreed percentage of the claim amount for our time and knowledge. If this is your first claim, then you can backdate the claim up to a maximum of two years.

You qualify for a free assessment, to ascertain whether you can claim if you meet the following criteria

  • –  A UK “Limited” Company
  • –  Annual Turnover exceeds £250,000
  • –  Have filed a least 12 months set of accounts to HMRC

New Era Group Limited’s successful partnership with the UK’s leading company for R&D tax credit claims has seen us assist UK Businesses, from a variety of sectors, in claiming millions of pounds through the scheme. New Era Group offers a free qualifying and claim estimation service to any UK based company that meets the minimum criteria.

For a free assessment, estimate and pre-approval for your business, simply complete the form on this page for a call back.

Watch our explainer video

More about R&D Tax Credits………………………….

Tax benefits of R&D claims

The effect of an R&D claim is to reduce taxable profits / increase taxable losses. The claim can: reduce profits, reduce profits and create a loss, or increase pre-existing losses. There are three main types of tax benefit that arise from a claim for R&D tax relief, namely:

Payable cash credit

For loss-making SMEs, the payable cash credit is not treated as taxable income. For loss-making Large Companies, the payable cash credit ( see RDEC section) is treated as taxable income.

Rebate of corporation tax

Companies that paid tax in the previous two years can roll back the relief to get a rebate of Corporation Tax. (This is tax they would not have paid if they had made the claim at the time.)

Enhanced deduction

That can be carried forward. Some companies will have no option but to keep the relief for use in future years and others will choose to do so because they are confident that they will be paying tax at a higher rate in the future.

SMEs and large companies

An SME is a company with fewer than 500 FTE staff that satisfies at least one of the following conditions: revenue less than €100m / balance sheet assets less then €86m. Only SMEs can access the SME scheme. Under the SME scheme the rate of relief can be as high as 230%. Lossmaking SMEs have the option to surrender some of their losses for a payable cash credit from HMRC. A Large Company is generally one with 500 or more FTE staff, or one with under 500 staff but revenue greater than €100m and balance sheet assets greater than €86m. SMEs may need to claim under the RDEC scheme, under certain conditions.

The RDEC Scheme

The Research and Development Credit (RDEC) scheme has been introduced for any R&D expenditure being claimed under the large company scheme as of 1st April 2013. It allows large companies, and SMEs forced to claim under RDEC, to obtain a payable cash sum, if they are loss-making or an offset of tax payable if they are profitable. It replaced the Large Company Scheme with effect from 1st April 2016. The value of the ATL tax credit is 11% of qualifying R&D expenditure. However, as this is “above the line” the credit is subject to tax.

What kind of activity qualifies?

What constitutes R&D for most people may be very different from HMRC’s interpretation, leading to at best, wasted time and at worst, an HMRC investigation.

Qualifying R&D activity can

  • Be undertaken in almost any industry.
  • Include trying to make something cheaper, faster, smaller, larger or longer, etc
  • It can even include duplicating a product, process, service or device, as long as it’s in an appreciably improved way.

According to HMRC, a company is undertaking R&D when they’re

  • Overcoming technological uncertainties aimed at…
  • Achieving an advance in technology…
  • Which isn’t readily deducible by a competent professional
  • Encouragingly, R&D is still deemed to have taken place whether the project is successful OR NOT: it’s the “seeking” that counts.
  • Improvements to manufacturing processes or machinery (doing things faster, at a better quality, with reduced waste or improved safety)
  • Ergonomics – ease of operation or suitability of manufactured products.
  • Computer models – for example to evaluate stresses or fluid flow.

 

Key benefits are:

  • Funds delivered 4-6 weeks from acceptance by HMRC
  • HMRC targeted to increase uptake
  • Initial claim can be backdated 2 years
  • Benefits apply to both profitable taxpaying and loss-making firms
  • No Claim, No Costs
  • Tax Free and does not have to be paid back
  • Claim every 12 months after your accounts have been submitted

Financials Required:

  • Filed Accounts for last two financial years
  • CT600 Tax Returns for last two financial years
  • Tax Computations for last two financial years (Corporation Tax)
  • PAYE Summary for last two years
  • PAYE Reference Number
  • VAT Number
  • Completed Sign Up Pack to act on your Behalf with HMRC