R&D Tax Relief for Classic Car Restorers

Research and Development (R&D) Tax Relief can help classic and vintage car restoration companies 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 innovation and global competitiveness. The scheme has been around since 2000 and last year over 25,000 UK companies claimed almost £2.9bn in 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 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.

Qualifying R&D Activities

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.

R&D claims are often overlooked because business owners over-estimate the level of innovation required to claim, from experience, qualifying R&D activity can include:-

• Performance enhancing design work – improving rpm, horsepower and fuel efficiency
• Innovative engine rebuild and redesign projects
• Reboring, machining or designing of components
• Developing engineering drawings and specifications
• Performing CAD modelling
• CNC machining
• Designing and developing moulds, jigs, dies and fixtures
• Improving metalwork including casting, welding and grinding
• Design and development of new tools
• Improving product quality