Research and Development (R&D) tax relief is a government incentive aimed at encouraging companies of all sizes and in all sectors to invest in R&D activities. The financial benefits can be considerable.
Introduced in 2000, the R&D tax credits scheme is the UK Government's way of encouraging new and innovative product / service development. By reducing some of the financial risk associated with new product development the Government believes it will see a significant improvement in research and development activity that will translate into wider economic benefits across the UK.
Any company based in the UK that invests time and money to improve an existing or develop a new product / service through innovative science or technology, using properly qualified staff and approved project controls is likely to qualify of this assistance.
So far around 9,000 SMEs and 1,900 larger companies have claimed R&D Tax Credits.
The R&D tax credits can reduce a company’s tax bill or, for some small and medium sized companies (SME’s), provide a cash sum. The Scheme allows companies to claim tax relief on eligible expenditures of up to 225%. This means that for every £100 spent on qualifying costs the company could have income which is subject to corporation tax reduced by an additional £125 on top of the original £100 spent. SME’s can, in certain circumstances, surrender this tax relief to claim payable tax credits in cash from HM Revenue and Customs.
Davidson Chalmers is proud to be part of the Stonecracker Scientific Legal Network, which comprises the only law firms in the world specialising in R&D Tax Credit claim preparation. If you’d like to know more about claiming for R&D Tax Credits just get in touch.