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Essential criteria for R&D tax credit claim

It’s common for businesses to either not be aware that the R&D tax credit scheme is there or think that their business is ineligible because their innovation isn’t worthy of a claim.

In truth, there are plenty of businesses in the UK that do not claim the tax relief when they are well within their right and meet all of the necessary criteria to be able to have a successful claim.

With so much to gain from applying, it’s important for an innovative business to understand the criteria for applying and know that the scheme isn’t just available to those in lab coats. Here is are the fundamental areas that must be met by companies in order to apply for tax credits, lab coats or no lab coats.

Corporation tax

R&D tax relief is a reduction in UK corporation tax. So, to be eligible for the relief, the company must be paying UK corporation tax. This is the main fundamental and is regardless of if the company is profitable or loss making, the sector the business is in and the size of the company.

Money spent on innovation

R&D tax relief is reclaiming money so costs attributed to the innovation are vital. It is possible to claim expenditure relating to staff costs, both direct and indirect, and consumables (costs for materials, energy, trials etc.).

Qualifying activities

Because the tax relief is available across a range of sectors, the definition of research and development is an activity that resolves ‘scientific or technological uncertainty’. This could be anything from a food manufacturer experimenting with new flavours to a game developer creating a new game. If there are any doubts about if your company is eligible, get in touch with an expert.

R&D tax credit specialist

The process of claiming is a technical assessment, so it is important that companies instruct a specialist advisor to help. If you’re one of the many companies that are missing out on R&D tax credits or are unsure if you are eligible, contact R&T Consultants today on 01858 445 522.

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