The two year window for claiming Research and Development (R&D) tax relief is fast approaching for companies, with upcoming year-ends.
R&D Tax credits can be claimed for the accounting period ending within the last two years. So a company with an April accounting date has until 31 December 2019 to make a claim for qualifying expenditure incurred from 31 December 2017-19.
R&D Tax relief allows companies to claim generous tax savings for their innovative activities. Opportunities for making a claim are often overlooked, with business owners and accountants overestimating the level of innovation required to claim or underestimating how valuable this form of relief can be. Our average claim for SME’s is over £50,000 so it could really make a difference!
Who can claim?
The key tests in the eyes of HMRC are did the outcome create an appreciable improvement, was it challenging to overcome and was the answer not known by a competent professional or easily found.
When you are considering if R&D applies to your clients, the key questions to ask are:
- Do the projects they work on need a number of peoples input to help decide a solution? Not lots of different ways to achieve the outcome, but achieving the outcome isn’t certain from the outset
- How much of their work takes the skill, knowledge and expertise of a competent professional that isn’t routine?
- Are they considered a specialist contractor by others?
- Are there a limited number of companies out there who can do what they do?
If you answer ‘yes’ to the above questions, it is very likely that a conversation about R&D could be highly valuable to you or your client.
Eligible companies can obtain tax relief on qualifying expenditure either by reducing taxable profits or creating (or increasing) tax losses which can be sacrificed to HMRC in return for a cash repayment. R&D tax relief can be very generous for UK SME’s with the equivalent of up to 33p for every £1 of qualifying expenditure.
Helping you to help your Clients
Our award winning team of sector specific specialists can help pre-qualify your client’s eligibility to claim R&D tax relief. Allowing you to have positive conversations with your clients delivering the good news and potentially an early Christmas present from HMRC! We make sure that all our claims are completed as painlessly as possible, reducing the input and admin required from both you and your clients, whilst making sure every claim is maximised. We are extremely proud of our 100% success rate with over 6,000 claims completed to date.
With many client’s year-end approaching, why not take the opportunity to speak a member of our team or your PfP account manager to find out just how easy it is to make your client’s innovation pay.