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What are R&D Tax Credits?
In 2000 the UK government launched R&D Tax credits. Incentivising the investment into research and innovation by organisations in exchange for tax credits by HMRC on expenditure.
You could be entitled to 33p on every £1 spent.
R&D Tax credits is a corporation tax relief that may reduce your tax bill, or in some situations you may receive a payable tax credit. R&D takes place when some element of project work within your organisaton is looking to achieve an “advance in overall knowledge or capability in a field of science or technology”.
There is a set criteria to meet, we discuss this further down.
Did you know, the average R&D Tax claim submitted to HMRC is £53,876?
What counts as R&D?
HMRC is very specific in this. HMRC states “a company must be carrying out research and development work in the field of science and technology. This can include new processes, products, or services, making appreciable improvements to existing ones, and the duplication of existing processes, products and services in a new way.” Basically, you need to be able to prove that the R&D work you are doing is aiming to lead to an advancement on the current status. For example, software development, engineering design, construction techniques, bio-energy, cleantech etc.
It’s our job to help you define what aspects of your project work can be claimed for.
All about R&D Tax Credit
The value of R&D Tax Credit
What costs can you claim against?
The R&D costs that can be claimed against are quite broad, and can range from direct and indirect staff costs, subcontracted R&D costs, software, consumables, prototypes and collaborative working. The main factor in establishing what costs can be claimed against is the submisson of evidence to HMRC supporting the claim.
Understanding what can be claimed against, and extracting supporting evidence is where we excel.
Claims can be submitted back to 2 full financial years.
Could you be owed R&D cash?
Find out if you could potentially be owed some R&D cash. Answer some quick questions in our eligibility checker and we’ll tell you instantly how likely you are to have a claim.
How much R&D credits could you receive?
What is your estimated spend on R&D per year?
We estimate you could receive up to £13,000 as a tax refund or reduced tax liability
We estimate you could receive up to £65,000 as a tax refund or reduced tax liability
We estimate you could receive up to £130,000 as a tax refund or reduced tax liability
We estimate you could receive up to £260,000 as a tax refund or reduced tax liability
What is your estimated spend on R&D per year?
We estimate you could receive up to £16,675 as a tax credit
We estimate you could receive up to £83,375 as a tax credit
We estimate you could receive up to £166,750 as a tax credit
We estimate you could receive up to £333,500 as a tax credit
Frequently asked questions
Why can’t I submit a claim myself?
The HMRC R&D Tax Relief scheme is really quite complex, with one big risk involved – HMRC compliance check. If HMRC wants to check on any detail involved within a claim it could open up the possibility for numerous details to be checked. Like business expense audits, this risks your organisation being tagged frequently by HMRC. Next Level Business have vast amounts of experience working with clients to develop their claim, not only saving time but also in reducing risk
Can my accountant make my claim?
The reality is that many accountants are not trained in R&D Tax Relief claims and therefore miss out on the potential opportunities that we have experience with. R&D Tax relief claims require an in-depth business level knowledge rather than a purely financial level, which is where the Next Level Business team are at their most valuable.
Can I claim if my company is loss-making?
A loss-making SME can recoup up to 33.35% of its R&D expenditure through the R&D tax relief scheme. This is more so than a profit-making business. As a loss making company, you are more likely to receive the money into your bank account rather than offset against future tax.
What if the project failed?
In their essence, R&D projects are risky ventures that can fail. This does not affect whether the project can be claimed against.
What happens if HMRC investigates my claim?
If an investigation results in a claim being classed as overclaiming there is a potential for HMRC to issue fines to an organisation, in addition to the time spent with HMRC throughout the investigation. In support of all our R&D tax claims, we ensure the evidence for the claim is established and correct.
R&D Tax Credits with us
Our clients frequently claim more with us than their previous advisors. One of the many reasons why you should work with us in claiming R&D Tax Credits.
Full Service
We provide an end to end service from discovery to cash* (assuming you’re able to make a successful claim)
Simple
Our simple 4-step process starts with a discovery meeting with you and your team.
Contingent
Our service fee is contingent, which in plain english means: if you don’t make a successful claim, there is no fee.
Additional benefits for clients
If you’re currently a client (or become a client) of our accounting services, we make your R&D journey even more profitable.
Value Add: We can advise on potential projects you might have and whether they might qualify following our regular conversations.
We Know You
We know your business and your numbers, so are best placed to spot potential and maximise your claim.
Integrated
We can integrate this process into your financial year end process so you have a seamless service.
R&D Tracking
We set up to track R&D costs in your accounting software throughout the year.
What makes us
different?
We are your entire finance department—bookkeeping, specialists, software, and processes— at a fraction of the cost of building a dedicated department.
Industry Experts
Our finance and accounting experts are focused on helping you manage growth and reach your goals. Get a dedicated finance function with expertise in your industry.
We Scale
Our finance function and level of support grow with your business needs. Whether just starting out or already international, you’ll find us competitive for the services our clients find invaluable.
Strategy
Our finance experts offer support from operations to strategy. We bring our experience from large public companies to ambitious, high-potential, high-growth businesses like yours.
Cohesion
We plan for the complexities of internationalisation, fundraising and managing growth. Our consistency brings clarity and speed to decision-making for you.
Tech Provided
Our team designs and operates high-tech finance functions for many growing businesses. Draw on our accumulated experience and achieve best practices and efficiency.