What Goes Into an R&D Tax Credit Claim?
Research & Development tax credits – A to Z
You can qualify for research and development tax credit if you undertake activities that involve resolving scientific or technological uncertainties to achieve an advance in science and/or technology. Now you might think that you don’t make advances in science or technology. But the advance may be a new or significantly improved product, process, system or service, where you hold the financial risk as to whether your endeavours succeed or not.
You don’t have to create something from scratch. If you are making significant improvements to reduce costs, improve quality or bring something up to date, those would be legitimate R&D aims.
Once your have established that you are doing qualifying R&D activities you are ready to make a claim for R&D tax relief/credits.
HMRC (Her Majesty’s Revenue and Customs) require that claims are supported by:
- A layman’s description of the scientific and technological advances that each qualifying project was attempting to achieve (the Technical Justification Document).
- A scoping exercise to identify qualifying R&D costs.
- A description of the scientific and technological uncertainties which had to be overcome on projects in order to achieve the scientific and/or technological advances.
- Details of how and when those uncertainties were resolved.
- A qualifying costs breakdown (including an indication of the cost per project if there is more than one).
Definition of R&D
The definition of R&D for tax purposes is covered on the HMRC web site here.
Fast track qualification process
While it is a great idea to read the online definition, that still may not give you sufficient certainty or confidence as to whether or not you are undertaking activities that qualify for research development tax credit. We can offer you a faster route, just call us on – tel 0771 9439 229 – and we will talk it through with you; or fill in the contact form and ask us to give you a ring.
Are you ready to find out if you qualify or how much your R&D claims could be worth?