Skip to content
RandD Tax
  • R&D Tax Claims
    • Claims Process
    • What Qualifies
    • Benefits
    • Industries
  • For Accountants
  • Enquiry Service
  • Knowledge Base
    • Resources
    • Blog
    • Case Studies
    • FAQ
    • Webinar
  • Our Company
    • Our Team
    • Ethical Code
    • Partners
    • Giving Back
  • Contact
  • 01483 808301
  • FREE ASSESSMENT
Menu
  • R&D Tax Claims
    • Claims Process
    • What Qualifies
    • Benefits
    • Industries
  • For Accountants
  • Enquiry Service
  • Knowledge Base
    • Resources
    • Blog
    • Case Studies
    • FAQ
    • Webinar
  • Our Company
    • Our Team
    • Ethical Code
    • Partners
    • Giving Back
  • Contact
  • 01483 808301
  • FREE ASSESSMENT
search...
Search
Close

R&D and Financial Record Keeping

  • November 2, 2015
  • 10:52 am
  • News on R&D Tax Credits

Note: All articles in this blog are intended to provide general guidance only. Please contact us for specific guidance for your particular circumstances.

R&D Tax relief is a very valuable benefit to companies undertaking R&D, often saving between 25% and 34% of R&D costs and providing welcome cash flow into the business at critical times.

However, frequently overlooked is the need to ensure adequate record keeping to evidence your company’s R&D expenditure and costs. Generally this is simple if done week-by-week throughout the year, but almost impossible if done retrospectively. Any company expecting to make regular R&D tax relief claims must put into place systems and processes to provide evidence to support the claims.

Identification of R&D expenditure is different from typical accounting processes in one crucial respect – judgement is needed to determine which parts of R&D expenditure are ‘qualifying R&D’ under the R&D tax relief schemes’ rules.

There are two types of cost allowable under the R&D schemes, those derived from employment costs (which may be calculated using existing payroll, pensions data and recorded time / effort data) and those derived from purchase invoices / purchase receipts.

Therefore, at the very least, if you do nothing else to keep records of your R&D activities and expenditure, do the following:

1. Record the names of projects you suspect might contain R&D as you go along

2. Implement project orientated time (effort) recording for all Directors, employees and agency staff involved in any projects that might contain R&D activity

3. Identify, perhaps by (ledger) coding potential R&D invoices (or photocopying and putting in a pile), all expenditure items that might contain R&D expenditure. In some cases it might be simpler and more effective just to identify the suppliers that typically invoice for R&D activities, so that all their invoices can be evaluated when preparing the claim.

The result will be that identifying R&D expenditure at the end of the financial year becomes a simple process of evaluating what proportions of known R&D project costs are ‘qualifying R&D’ suitable for inclusion in the R&D tax relief claim… Much simpler than trying to remember what happened 15 months ago!

Nick Cook, Principal Consultant.

Share this post

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on pinterest
Share on print
Share on email

Leave a Comment Cancel Reply

Your email address will not be published. Required fields are marked *

Arrange a FREE ASSESSMENT

FREE ASSESSMENT

Stay in Touch

Sign up for all your R&D Tax news and events

Website

  • Homepage
  • Our Company
  • Giving Back
  • Blog
  • R&D Tax Claims
  • Claims Process
  • What Qualifies
  • Benefits
  • For Accountants
  • Resources
  • Webinar
  • Resources

Customer Service

  • Website use, Cookie, & Privacy Policy
  • RandDTax Portal

Get in Touch

  • Call us: 01483 808301
  • info@randdtax.co.uk
  • All Contact Details
Facebook-f
Twitter
Linkedin

Copyright © 2019 R&D Tax

Designed, developed and hosted by mtc