R&D Tax Credits eligibility
Is my business eligible?
If you're a business with a thirst for innovation, you'll love what R&D tax relief can do for you. Developed for innovation-focused businesses, it is designed to incentivise growth by encompassing as many businesses as possible.
The great news is that if you are a registered Limited company in the UK and pay corporation tax, you are likely to be eligible. We break down the eligibility criteria and categories of expenditure.
R&D Claim Criteria
Eligibility criteria are strict, yet broad, ensuring as many businesses are eligible as possible:
You must be:
- A registered Limited company in the UK and Wales
- Subject to corporation tax
- Carrying out qualifying research & development activities
- Spending money on these activities
Our specialist consulting teams will quickly and efficiently help you understand the whole process, your eligibility and what expenditure you could reclaim.
What spend qualifies for R&D?
R&D is generally classified as:
“finding new or inventive ways of overcoming challenges or problems that don't have obvious or straightforward solutions.”
The general rule of thumb is that, if you have spent money on developing new products, services, operations, processes, knowledge or solutions, you are likely to have a valid claim.
Projects you have invested in don't even have to have been successful, and you can claim for work you have undertaken on a client's behalf as well as for your own business.
It is by far the most confusing part of the process. The range of expenditure you can include in your claim is vast, and not always cut-and-dry.
But before you lose a wink of sleep, this is where our specialist team's experience shines. Contact us today and we'll help you uncover where you could receive a valuable cash rebate.
Example cases:
- A fish and chip shop creating a new batter recipe
- A web development company inventing new software
- An architecture firm developing a new structure that stops heat from escaping
Common types of R&D expenditure
Staffing
Have you hired new staff to improve what your business can offer? Salaries, pension contributions, employer national insurance contributions and travel expenses can all be included
Freelancers / subcontractors
If you have hired freelancers or external subcontract support to carry out tasks that fall under research or development, you can claim some of those costs back.
Software
If you run a business that relies on software, the cost of licences will add up. R&D tax credits can ease the burden. The software only needs to partially facilitate R&D activities
Heating, lighting & water
Every business uses these essentials to keep itself running. This is an excellent example of how many costs can be claimed back.
Materials
Whether a high-performing PC or a simple desk & chairs, materials used by your business also often qualify as R&D.
Clinical trial volunteers
If you have made payments to volunteers as part of a clinical trial, these payments can be included in your claim.
Examples of successful cases:
£134K.
Claimed for an engineering company that had undertaken the design and development of fire doors and fire door sets to enhance the safety and fire protection rating for use in residential tower blocks.
£109K.
Claimed for a bus and taxi company that had undertaken the design and development of a new type of Hackney vehicle capable of withstanding a head-on collision at 50 mph, and a new minibus capable of transporting passengers in wheelchairs without the passenger having to leave the wheelchair.
£31.3K.
Claimed for a car dealership company that had designed and developed bespoke software to integrate a range of functions into one centralised system that would seamlessly incorporate all the monitoring, analytical data, and applications required across all dealers.
£39.6K.
Claimed for a restaurant business that developed a software platform to enable the integration of an AV system with a third-party software application. This claim showcases the breadth of industries and sectors that can benefit from Yuzu's R&D services.
Common R&D Myths
You can only claim if you work in the science & technology industry
Businesses in virtually any sector can benefit from the government's R&D tax relief schemes.
You can only claim if you've invented something new
Whilst your project does need to have attempted to overcome a challenge where the answer is not obvious or easily uncovered, this can be relating to an existing service or product, it doesn't have to be something brand new.
Claiming won't help my bottom line
On the contrary, R&D tax relief can be taken directly off your bottom line and reduce your next corporation tax liability.
Only a profit-making business can claim
One of the great benefits of the scheme is that both profit- and loss-making businesses can claim. HMRC know that many businesses show a loss precisely because of their investment in R&D to grow and prosper, and are rewarded accordingly.
You have to spend a certain amount to be eligible
We find that most companies underestimate their expenditure, let us take a look and see if you can claim today.
You can only claim for the current financial year
Claims can be backdated two full financial years plus expenditure from the current financial year. So, if you are nearing your financial year-end, you can claim for almost three full financial years.
Making a claim is a lengthy process
If you have submitted your latest year-end accounts, claims can be investigated, submitted and paid out in full by HMRC in as little as six-to-eight weeks. Furthermore, our industry-leading consultants, with their experience from the world's largest consulting firms, take on the heavy lifting so you don't have to. Win-win.
You can't claim if you're a small business
We help businesses across the entire budget spectrum. Indeed, the majority of businesses we help are small to medium enterprises and are the very backbone of the economy.
Only large claims are worth it
Whilst the answer to this is subjective, imagine the benefit to your business of reclaiming up to 33% of your last three years' R&D expenditure in the next eight weeks.
It's too good to be true
The R&D scheme has been operational since 2000 and is a government-backed scheme; it is fully legitimate and official.. We have dozens of clients who were at the same point you are right now, contemplating their next move, all of whom are delighted they became part of the Yuzu Group story.
Start your R&D Tax Credit journey
Ready to see the fruits of your labour? Begin your R&D tax credit journey with us now. Whether this is your first time or you've applied before, Yuzu Group has got you covered.
Start Growing Today