What are R&D Tax Credits?
Research and Development (R&D) Tax Credits are government reliefs, and support businesses that are making advances in science and technology.
They can be used for businesses that are interested in creating technological and research-based advancements in their field. The Research and Development grants are available for both successful and unsuccessful projects, encouraging business owners to make a change and initiate innovation within their sector.
How Much can a business claim with an R&D credit?
The R&D credit is 13 percent on qualifying activities as of 1 April 2020.
What Projects Qualify for R&D Credits ?
R&D Credits are used for specific projects. For projects to qualify they must fulfil the following criteria:
- Must be part of company’s existing business, or have an intention to be a business line you intend to carry out based on the research the research and development claim is supporting
- Focused on an advance in science or technology within that sector
- Has to overcome uncertainty and attempted to overcome the uncertainty
- Solving the problem is not easy or straight forward
Types of R&D Credits:
There are two types of R&D credits that are available, dependent on the firm making the claim.
SME R&D Credit: This is for companies with less than 500 employees, and a turnover of less than € 100 mil.
Research and Development Expenditure Credit (RDEC): For larger companies with 500 or more staff and either more than €100 million turnover or €86 million gross assets.
Useful tips for R&D Claims:
Prior to commencing an R&D project, you can approach HMRC for prior approval known as Advance assurance here