Research and Development R&D

31 May 2016

The R&D Scheme is an incentive for companies operating in the UK to increase their investments and spending’s on innovative projects where they seek to achieve an advance in science or technology or look to overcome a scientific or technological uncertainty.

HMRC first Introduced R&D tax credits for SME’s in 2000. A similar regime was introduced in 2002 for larger companies and then the research and development expenditure credit (RDEC) was introduced by the Finance Act 2013 from the 1 April 2013.

The two main criteria for eligibility are “advancement” and “uncertainty”, if your company is taking a risk by innovating or improving a process, product or service then it could potentially qualify for R&D tax credits. These tax credits could be claimed on the revenue expenditures such as staff costs, subcontractors and consumable items.

In November 2015 HMRC introduced R&D Advance Assurance to encourage more claims and to provide certainty to companies that they will receive R&D tax relief.

Companies who have not previously applied for R&D and with annual turnover of £2M or less who have less than 50 employees can apply for R&D Advance Assurance.

Another benefit of advance assurance is that R&D claims will hold for three years without further enquiry from HMRC, although assurance is expected to face a greater scrutiny than some of the smaller R&D claims.

You could use the link below to apply for R&D Advance Assurance or alternatively contact us to help you with the application process.

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