46% Tax relief for R&D expenditure
At SMH Chartered Accountants, we understand that Research and Development (R&D) is a vital part of driving innovation and growth in businesses. That’s why we offer our clients R&D tax relief services, which can provide significant tax savings for companies investing in R&D activities.
46% Tax relief for R&D expenditure
R&D tax relief is a government-backed incentive designed to encourage companies to invest in R&D activities. It allows companies to reduce their corporation tax bill or claim a cash payment from HM Revenue and Customs (HMRC) based on their R&D expenditure.
Companies can claim R&D tax relief if they’re working on a project that seeks to advance scientific or technological knowledge, and the work involves addressing technical uncertainties.
The relief is particularly valuable for SMEs, who can claim up to 46% of their R&D expenditure as a tax credit or cash payment. Large companies can also claim relief, but at a lower rate of 10%.
We have a team of experienced tax advisors who can help businesses identify R&D activities that qualify for relief and ensure that their claims meet HMRC’s stringent requirements. We will work closely with our clients to understand their business and identify eligible projects, ensuring that they maximize their tax savings while complying with all relevant legislation.
Qualifying R&D activities
The definition of R&D is a lot more inclusive than many people think. Most critically, it is not just restricted to pure scientific research, it includes the development of new products and processes.
Research and development both qualify.
Any business which uses science or technology to improve a product, or a process, or a material, or a service, in any way, could claim. For example, all of the following activities could qualify:
- Reducing energy usage in a manufacturing process
- Developing a component that is more efficient
- Developing new technology to improve production methods
It is important to note that R&D activity expenditure is eligible for enhanced tax deduction rates regardless of whether or not the project is ultimately successful in its aims.
Contact the SMH Chartered Accountants team on info@smh.group or 0114 266 4432 to learn more about our R&D tax relief service and how we can help you.
