R&D Tax Credits… Are you missing out?

R&D to do shutterstock_8137816

Key Requirements for R&D tax credit qualification

Many companies are unaware of the activities that can qualify for R&D relief.

Pierce C. A Limited have specialist skills and knowledge of the R&D tax system and are able to help you identify qualifying projects and formulate a successful claim.

The definition of R&D is quite wide and it is worth considering if you have:

  • Made bespoke or customised products
  • Developed new products or introduced new
    products to the market
  • Made environmental improvements to your
    processes
  • Consistently made manufacturing process
    improvements
  • Carried out design work in-house or subcontracted
    design
  • Carried out prototyping or made models,
    patterns or tooling
  • Developed or improved in-house software
  • Changed the composition of your products in
    response to changes in legislation
  • Consider yourself to be a market leader in a
    product, process or technology
  • Engaged in ‘problem solving’ to meet your
    customers’ needs

Example 1

R&D expenditure of £100,000 in a profit-making company could deliver corporation tax savings of £26,000.

R&D expenditure £100,000
Enhanced R&D relief £100,000 x 130% = £130,000
Normal taxable profits £250,000
Revised taxable profits £250,000 – £130,000 = £120,000
Corporation tax saving £250,000 – £120,000 = £130,000 x 20% = £26,000
 Quote2 Quote1

Example 2

R&D expenditure of £100,000 in a loss-making company could deliver corporation tax savings of £33,350.

R&D expenditure £100,000
Enhanced R&D relief £100,000 x 130% = £130,000
Normal tax losses £100,000
Revised tax losses £100,000 – £130,000 = £230,000
Corporation tax credit cash refund due £230,000 x 14.5% = £33,350*
* Tax losses of £230,000 surrendered

For more on R&D tax credits contact:

 Tom Wilkinson  bensmith
Tom Wilkinson Ben Smith
Research and Development Tax Specialist
Research and Development Tax Specialist
Email: t.wilkinson@pierce.co.uk
Email: b.smith@pierce.co.uk