Frequently Asked Questions

For a small or medium sized company (SME) in the UK, corporation tax of £2,470 can be saved for every £10,000 of qualifying R&D expenditure. Substantial savings can therefore quickly build up even with modest amounts of expenditure. Loss making companies can also benefit as they can claim a cash payment at a rate of 14.5%.

If a company has not claimed before, then a claim for the previous two financial years can normally be made. This can lead to a repayment of corporation tax already paid – for every £1 of qualifying R&D spend, approximately 25p of corporation tax is repaid in cash by HMRC. Where little or no corporation tax has arisen, a company may still be able to claim cash payments of as much as 33.35p for every £1 of R&D spend

A large company, or an SME that receives certain grants, can claim under a separate scheme known as the R&D Expenditure Credit (RDEC). This enables a company to claim a taxable credit based on qualifying expenditure at a rate of 13%.

Yes, companies receiving the Grant for R&D from Invest NI can make a claim although the benefits available can depend on the wording of the Letter of Offer.

Yes, HMRC wants companies to claim.

It wasn’t always this way and in the past HMRC could be inflexible. Its interpretation of what represented qualifying R&D was very narrow. Nowadays, though, HMRC is publicly encouraging companies to make claims where they are undertaking qualifying R&D activities.

To qualify for R&D tax credits, a company must be trying to achieve an advance in science or technology. This is often the case when a company is spending money on developing new products, processes or services – or improving existing products, processes or services.

The definition of R&D is wider than you might think, and the actual work does not have to be totally ground breaking. R&D can still qualify even if it has already been undertaken by another company, depending on the level of information that is in the public domain.

We find that companies often take the innovative things they do for granted. Perhaps the best way to illustrate what qualifies is to provide examples of recent claims we have made for companies:

• Food processor developing gluten free sausages
• Manufacturing company making fuel efficient new burners
• Company developing new anodising processes for the aerospace industry
• Farm machinery manufacturer making innovative new products
• Engineering company making bespoke steel products
• Nursery seeking to extend the growing season for lettuces
• Medical devices company developing advanced laparoscopic surgery products
• Distillery developing new gin, whiskey and poitín products
• Company trialling various anaerobic digester feedstocks
• Engineering company making advances in wind turbine technology
• Manufacturing company developing new composite products for the automotive industry
• Software company developing new business systems
• Mushroom grower seeking to improve quality and yield
• Printing company developing new packaging products
• Bakery seeking to extend the shelf life of products
• Craft brewer trialling different ingredients and processes
• Bioscience company developing innovative diagnostic tests for Africa

No, it is the R&D activity that is important rather than the success of the project. An R&D project that fails can lead to a strong claim, especially because it demonstrates just how difficult the project was.

A company registered in the UK can claim for the previous two financial years.

We will represent you in any enquiry from HMRC and will robustly defend any claim we prepare. This is included in our fee.

Our fee is normally a percentage of the tax benefits achieved, and is only payable if the claim is successful. Our rate is very competitive.

We have a great team of tax accountants and technical consultants (engineers, scientists and software specialists) whose aim is to maximise the tax benefits that you are entitled to.

Read more reasons here – why choose us.

We have a specialist R&D tax team with the aim being to maximise the tax benefits to you as our client. To achieve this, we get the necessary information from you and then prepare the claim on your behalf, to minimise the time you have to spend on it.

In this way, you get maximum benefit with minimum input.

The R&D tax credit in Ireland is calculated as 25% of qualifying expenditure incurred in the carrying on of qualifying R&D activities.

In the Budget 2020 it was announced that the R&D tax credit would increase to 30% for micro and small companies, subject to State Aid approval.

To qualify, the R&D must be systematic, investigative or experimental, in a specified field of science or technology. Activities are qualifying where they seek to achieve a scientific or technological advance, and also involve the resolution of scientific or technological uncertainty.

Qualifying R&D can involve the development of new or improved products, processes, services, materials, or devices.

By way of example, we have recently prepared the following claims which have been accepted by Revenue Commissioners:

• Development of multi-instrument access devices for laparoscopic procedures
• Research in the area of hemato-oncology
• Development of orthopaedic devices for joint replacements
• Deducing methods for determining low-level pesticide concentrations in water
• Development of Machine Vision inspection systems

No, R&D does not have to be successful to qualify.

We will represent you in any enquiry by the Revenue Commissioners. This is included in our fee.

Our fee is normally a percentage of the tax benefits achieved, and is only payable if the claim is successful. Our rate is very competitive.

We have a great team of tax accountants and technical consultants (engineers, scientists and software specialists) whose aim is to maximise the tax benefits that you are entitled to.

Read more reasons here – why choose us.