HMRC define R&D as activities that seek to:
- Achieve an advance in overall knowledge or capability in the field of science or technology
- And resolve scientific or technological uncertainties
In the simplest terms, this means that if you are working on something that has made you scratch your head and the solution is not already public knowledge or easily sorted by speaking to a competent professional– then its R&D!
Tell tale activities that feature eligible works include:
- Solving a technical problem
- New process development
- New/updated product development
- Service/software development
A common misconception is that your R&D project has to be ‘successful’. This isn’t the case! Even if you’re R&D work did not deliver what you hoped – you can still claim for the work you have done.
Making a claim
To make a successful claim, you will need to identify the money you have spent on R&D projects. The types of costs that you can claim include:
- Staff expenditure
- Sub-contractor costs (at a reduced rate)
- Externally provided workers (at a reduced rate)
Swift R&D is set up to allow SMEs to make claims under two types of government R&D tax scheme: the SME Scheme and the RDEC Scheme.
To claim using Swift R&D your business, and connected businesses, must:
- Be an SME (as per HMRC definitions)
- Have less than 500 full-time employees
- A turnover of under €100m or a balance sheet total under €86m
- Be eligible to Pay Corporation Tax
Size of the claim
The size of the claim and its benefit to your company is dependent upon the amount of money spent on eligible R&D activities, where the money has come from, the type of expenditure it is, what scheme it’s being claimed under and the company profit status. It gets a bit complicated if you’re not experienced.
Generally speaking, when claiming under the SME Scheme, your benefit is dependent upon the company’s pre-tax profit. This means if you are:
- Profit making you could receive £24.70 per £100 spent on R&D
- Loss making you could receive £33 per £100 spent on R&D
Where if it’s under the RDEC scheme you will receive a benefit, before paying tax on it, of £13 for every eligible £100 spent on R&D.
Your company may have accessed a grant to fund some of the R&D work you have carried out. That isn’t a problem! The experienced consultants at Swift R&D will be able to help you through each stage of the claim process to ensure every last penny of R&D is found and claimed.
What does HMRC need for a claim
Swift R&D works alongside your accountant to submit the claim to HMRC. Some accountants struggle with R&D tax claim submissions, whereas with our experience we minimise the risk of faults in the submission. You’ll need to submit:
- Amended CT600
- Amended Corporation Tax calculation
- Technical report showing all required details
At Swift R&D we amend your previously submitted Corporation Tax calculation and CT600, free of charge. Along with these documents we help you create a detailed and thorough technical report to justify your R&D tax claim to HMRC. We pride ourselves in creating reports that provide all the information HMRC needs. Swift R&D gives you expert advice with information without jargon in the form of:
- Detailed advice pages
- Step-by-step instructions
- Free interactive reviews with an experienced consultant
- Live technical support that helps you through this process (live chat or over the phone)
Our reports are the best in the business – just what you need for an R&D tax claim. Don’t risk your R&D tax claim by using a weak, incorrect, unreliable report. Use the best, use Swift R&D!