R&D Tax Credits

Eligible companies can secure up to a further 130% relief on qualifying P&L expenditure against tax, as well as claiming for the two previous years and then ongoing. On average this can save or recover up to £50,000 for your clients business.

How does the process work?

We then work with you to help maximise your identified clients’ claims and train your staff on how to identify future eligible clients.

Under normal circumstances, our claims will be processed, and your client will receive the refund from HMRC within six to eight weeks.

• We can Maximise Claims

  It is a common misconception that eligible businesses will not qualify for relief or that the process is long and arduous.

  We can help you put together a robust claim either as a standalone project or as part of a wider tax compliance and planning service.

• Example

  A UK limited company carried out £75,000 worth of qualifying research and development work.

  The company makes a profit in the tax year of £150,000.

  Tax position before claiming Research and Development

  Expenditure on eligible expense:                                                                             £75,000

  Company profit:                                                                                                               £150,000

  Corporation Tax due before claiming R&D (£150,000 x 20%):                        £30,000

  Tax position after claiming Research and Development

  Additional R&D tax relief on eligible expense (130% x £75,000)                   £97,500

  Company profit after R&D tax relief (150,000 – 97,500)                                    £52,500 =

  Corporation Tax due after claiming R&D (£52,500 x 20%)                                £10,500

   

  Tax Saving after claiming R&D                                                                                   £19500

• Case Study

  Penny Price Aromatherapy and the Academy of Aromatherapy and Health Studies

  Penny Price Aromatherapy and the Academy of Aromatherapy and Health Studies was founded by Penny Price in May 2003. The business sells aromatherapy products  and also provides aromatherapy training courses. When Penny started the business she spent most of her time hand-blending every recipe until the aroma and consistency of each product was just right. Penny has now developed over 400 different aromatherapy products including products specifically designed for skincare, men and babies.

  Croner Taxwise R&D specialists identified a claim of £122,560 producing total tax saving of £30,640 refund.

  “The whole experience was professional, with personal contact, and extremely easy to go through. I would recommend the Croner Taxwise R&D service to anyone who does R&D as part of their business.”

  Penny Price, Managing Director

• FAQs

  What rate of relief will be received?

  The size of the company or organisation determines the amount of relief that will be received. The tax relief on allowable R&D costs incurred on or after 1 April 2015 for a small or medium sized company or organisation is 230%. (A small or medium sized company or organisation is one with fewer than 500 employees and a turnover not exceeding £100 million). This means that for each £100 of qualifying costs, a company or organisation could have its Corporation Tax profits reduced by an additional £130 in addition to the £100 spent.  Alternatively, if a company or organisation has an allowable trading loss for the period this can be increased by 130% of the qualifying R&D costs – so that’s £130 for each £100 spent. This loss can be carried forward in the normal way, but only if the company chooses not to convert it to tax credits.

  How long can R&D be claimed for?

  Pilot activities qualify for R&D until the scientific or technological uncertainty associated with the intended advance is resolved. Essentially this means up until the point that there is no longer a scientific or technological uncertainty.

  Does a business still qualify for R&D if the activity failed?

  The Government introduced R&D tax relief as a way of rewarding innovation not necessarily just success. Therefore, so long as a company or organisation has an intention to achieve an advance in science or technology it does not matter if ultimately the associated uncertainty is not completely resolved or not resolved to the degree intended. Planned scientific or technological activities associated with projects which are not taken forward because of an unexpected technical or commercial challenge are also eligible for R&D relief.