R&D Tax Credits

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  7. R&D Tax Credits

Are you claiming your R&D tax reliefs?

Well, if you are, you are certainly in the minority. It is estimated that, of the 150,000 to 200,000 companies which are eligible for these reliefs, only 20,000 actually do claim. That’s just 10% – 13%!

It is perhaps a common misconception that to be engaged in Research and Development, a company must be running operational laboratories full of people in white coats. This is not the case.

Indeed, HMRC seem to be positively encouraging us to make claims for R&D activities and have introduced a scheme for companies to apply for advanced approval.

This means that, if HMRC agree that you are engaged in R&D activities, it will undertake to pre-approve your current and future claims without challenge for the next three years.


If you qualify, you could take advantage in one of two ways. First, if you are making profits, these can be reduced for tax purposes by 230% of your R&D expenditure. In effect, this means that you are making a corporation tax saving of £26 for every £100 spent on R&D. Secondly, if you are loss making, you can exchange this claim for enhanced R&D expenditure for cash – 14.5% of your R&D losses.

HMRC view various costs as being R&D expenditure, but in the vast majority of cases the main cost will be Staff Costs – probably one of, if not the biggest cost of any business. So the benefits soon start to become significant!

Briefly, R&D activities are those which seek to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of uncertainties. So, if someone asks you to, or you are looking to, produce something and you don’t know immediately how to achieve that product or service, you have the required uncertainties. Your work required to answer the question ‘can this be done?’ is the resolution to those uncertainties.

You are almost there!

Finally, the resolution which you seek cannot be ‘readily deducible by a competent professional in that field’. In practice, you can read that as meaning that you can’t just ask someone how to do it. If they already know, then that cannot be R&D in the HMRC’s opinion.

You would be surprised how many companies fulfil these criteria – between 150,000 and 200,000, in fact! If you are one of them, then make sure that you are not missing out on these significant tax benefits. Unlock your R&D tax credits – call us on 01482 427360, email help@360accountants.co.uk, or you could send us brief details of your enquiry via Live Chat. It could save you £1000’s!

‘Hull Kingston Rovers is not only one of the oldest professional Rugby League clubs, it is a globally recognised brand having won many trophies and famous victories in its 140 year history. We have invested heavily in training, performance and innovative sports science recently to try and get the most out of our players and coaching staff and when our club accountants 360 suggested we should make a Research and Development claim to HMRC we were only too pleased. The six figure sum they secured for us recently was a real god send as it came at the start of the Covid-19 crisis when our income had dried up. The process was slick and relatively pain less and I’d encourage all innovative SMEs partaking in research and development to engage with Andy and his team to see whether they qualify for the tax credits available.’

Mike Smith – CEO – Hull Kingston Rovers Football Club Limited

Download Our R&D Brochure Here