HMRC data reveals R&D tax relief hotspot

New data published by HMRC has revealed the hotspots for R&D tax relief claims.

R&D tax relief is a tax incentive from the UK Government designed to encourage companies to invest in R&D. The specialist tax relief has been around since 2000 to help innovative businesses undertaking R&D related activity claim a generous tax deduction or a cash refund from HMRC.

West Yorkshire-based businesses topped the league for the number of claims for R&D tax credits in 2016-17 at 1,175 claims, followed by South Yorkshire on 625 and North Yorkshire on 360.

The largest number of claims across the region came from manufacturing companies (925) who collectively claimed £45m, followed by information and communications firms (465) who claimed £25m, followed by professional, scientific and technical businesses (400) who claimed £25m.

WHAT IS R&D TAX RELIEF?

Research and Development (R&D) Tax Relief helps innovative businesses undertaking R&D related activity claim a generous tax deduction or a cash refund from HMRC.

R&D tax relief is a tax incentive from the UK Government designed to encourage companies to invest in R&D. The scheme has been around since 2000 and last year over 25,000 UK companies claimed almost £2.9bn in tax relief.

PROFIT MAKING?

230% R&D TAX RELIEF

Profit-making SMEs can reduce their corporation tax bill by up to 230%, e.g. an additional £130 deduction on top of £100 spent of qualifying R&D expenditure.

LOSS MAKING?

£33k FOR EVERY £100k

Loss-making SMEs can choose to surrender their loss and receive a tax relief by way of a credit – a cash refund paid by HMRC of up to £33,000 for every £100,000 spent on qualifying R&D expenditure.

Clients normally get their money 4-6 weeks after submission. Different rates of relief apply for larger companies with a turnover in excess of €100m. Contact us for further details.

WHAT ACTIVITIES QUALIFY FOR R&D?

HMRC qualify research and development as overcoming technological and scientific uncertainties or challenges; aiming at achieving a technological and scientific advance that couldn’t be easily worked out by a professional in the field.

Whatever size or sector, if your company is taking a risk by attempting to resolve these uncertainties, then you may be carrying out qualifying activity. This could include creating a new process, product or service or improving on an existing one.

To claim R&D relief you need to explain how a project:

looked for an advance in science and technology
had to overcome uncertainty
tried to overcome this uncertainty
couldn’t be easily worked out by a professional in the field

FREE R&D ASSESSMENT

In our experience, claims are often overlooked because business owners over-estimate the level of innovation required to claim. Complete the below form to arrange a free R&D assessment:

QUALIFYING R&D EXPENDITURE

Turn your qualifying R&D costs into valuable tax relief

Staff Costs

The cost of directly employing staff who are actively engaged R&D activity. Staff costs can also include class 1 NIC, pension fund contributions and bonuses.

Externally provided workers and sub-contractors

The cost of paying a staff provider for staff provided to the company, or a sub-contractor who is directly and actively engaged in carrying out R&D activity.

Consumable items

Consumable or transformable materials used directly in carrying out R&D.

Software

Revenue expenditure incurred on computer software employed directly in R&D.

Utility Costs

Power, water and fuel used directly in carrying out R&D.

To maximise an R&D tax claim, you need to understand R&D, not just tax. We combine specialist tax expertise with hands-on R&D and product development experience.

FIND OUT HOW MUCH YOU CAN CLAIM

OVER £22 MILLION SECURED

Jeffreys Henry LLP are specialists in hunting down every qualifying R&D cost and activity in your business.

In recent months, we’ve secured over £22 million of R&D claims on behalf of our clients.

STARTING YOUR R&D CLAIM

Jeffreys Henry LLP provide an end-to-end service that makes claiming R&D tax credits easy for you.

1

FREE R&D ASSESSMENT

We talk to your finance and tech team to hunt down every qualifying R&D activity.

2

R&D NARRATIVE

Our dedicated R&D account manager will work with you to document each R&D activity and split out the qualifying costs.

3

SUBMISSION TO HMRC

Once finalised, we’ll submit your claim to HMRC’s specialist R&D unit.

Jeffreys Henry LLP is an ICAEW registered accountancy firm giving you peace of mind of a robust R&D claim, with 100% success rate and no multiple year contracts.

WHAT IS R&D TAX RELIEF?

Research and Development (R&D) Tax Relief helps innovative businesses undertaking R&D related activity claim a generous tax deduction or a cash refund from HMRC.

PROFIT MAKING?

230% R&D TAX RELIEF

LOSS MAKING?

£33k FOR EVERY £100k

WHAT ACTIVITIES QUALIFY FOR R&D?

FREE R&D ASSESSMENT

QUALIFYING R&D EXPENDITURE

Turn your qualifying R&D costs into valuable tax relief

Staff Costs

Externally provided workers and sub-contractors

Consumable items

Software

Utility Costs

FIND OUT HOW MUCH YOU CAN CLAIM

OVER £22 MILLION SECURED

Jeffreys Henry LLP are specialists in hunting down every qualifying R&D cost and activity in your business.

In recent months, we’ve secured over £22 million of R&D claims on behalf of our clients.

STARTING YOUR R&D CLAIM

FREE R&D ASSESSMENT

R&D NARRATIVE

SUBMISSION TO HMRC

FURTHER INFORMATION

Bhimal Hira