Your R&D Claim

Expenditure incurred on activities associated with R&D project work could include:

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• Staff salaries, employer class 1 National Insurance Contributions and employer pension contributions
• The reimbursement of employee expenses might also qualify where certain conditions are met
• Borrowing staff from group companies
• Payments to third parties possessing relevant expertise for your work
• Additional labour resource via agencies or freelancers to work with in-house staff
• Software licensing fees
• Utilities (heat, light and power)
• Consumables (materials and equipment used by the R&D process)

No, your organisation can use third-party companies or individuals to fulfill its requirements for expertise. You may find that you have a mixture of both directly employed staff and contractors.

Your organisation has 2 years from the end of its accounting period to make an R&D tax credit claim.

The rates of relief differ (the SME scheme can return up to 33p for every £1 of qualifying R&D expenditure whereas under RDEC, the rate of return is around 10.5p for every £1 of qualifying expenditure) plus the methods of calculating the tax credits in the corporate tax computations are currently different.

Yes, R&D tax credits reward your innovation journey, not just the end result. Your project may never find a solution that goes to market but your organisation can still seek R&D tax credits to reward your efforts.

The goal of HMRC is to process claims within 28 days but some can take longer depending on the compexity of the claim or the complexity of your organisation's wider corporation tax affairs.

No, your organisation must be a corporate entity within the scope of charge to UK corporation tax.

The people with knowledge and skills relevant to your industry who can apply scientific or technological understandings to devise potential methodologies which take theoretical designs or concepts and turn them into practical solutions. People such as software developers, chemists, scientists, engineers, for example.

R&D takes place when the experts in your industry cannot easily produce a solution based on their knowledge or what they can deduce from publicly available information. They will use their understandings of how to combine knowledge and resources to create new or improved knowledge and/or capabilities within your industry.

Your organisation must not breech the following criteria for 2 consecutive accounting periods:

Fewer than 500 employees
And either an annual turnover of < €100m OR Gross assets of < €86m
Data for companies that are part of a group or deemed to be "linked" may also need to be considered for these tests.

Research and development tax relief rewards scientific and technological innovations and advancements. There's a thorough process to go through in order to determine your eligibility and make a claim but your organisation could receive a significant tax credit return if handled correctly.