A lot more than you’d think. R&D isn’t just about white lab coats. If you’re pushing boundaries and thinking out outside the box in a scientific or technological field, then you’re contributing to society itself and the government wants to help.
There are, of course, a few hurdles to jump before you qualify. The Department for Business, Innovation and Skills has a set of definitions for research activities, which you can see here, but key points include:
• The R&D must involve your core business, or one you want to set up if it goes well.
• The project must be pushing knowledge or capability forward as a whole, not just your own.
• Patents, copyrights and so on are helpful, but not essential.
• What you’re trying to achieve needn’t be tangible. Knowledge or cost improvements count.
• Even if your project doesn’t work out, it could still qualify for the scheme.
Small companies, meaning those with fewer than 500 employees and either:
• A turnover of less than €100 million or... • Gross assets of less than €86 million.
As of the 1st of April 2015, the relief is 230% of the qualifying expenditure.
For example, a company paying tax at 20% will save 45% of the cost of the R&D.
Small companies can also “surrender” trading losses caused by the R&D for a cash payment from HMRC. The payout is 11% of the loss surrender, but is capped at their total PAYE and NIC liabilities for the accounting period.
Small companies can also claim relief on the sub-contract work they do for larger companies. You can’t surrender losses for a payment this way, though. The relief is given under the Large Company Scheme, which is 130% of the qualifying expenditure.
Large companies, meaning those with more than 500 employees and a turnover of over €100 million, can claim relief of 130% of their qualifying expenditure.
This includes sub-contract work to small companies, charities, universities and other qualifying bodies.
HMRC is currently working on SME claims that were submitted up to the 1st of May 2019. RDEC claims being worked on go back to the 21st of December 2018. For businesses whose claims fall outside of tho...
The Kent Excellence in Business award show is always a fantastic event for us at RIFT. Kent’s business community is a dynamic and thriving environment, and the KEiBAs are a fitting way to pay tribute...