A quick guide to what is required for a project to be included in an R&D claim and what costs can be included.
Does my project qualify?
Find out below in our two videos.
These four questions require placing the context of the legislation and your potential R&D activities to see if a project qualifies. They are based on the 2004 BIS Guidelines. It takes both knowledge and experience to understand them and relate them to your projects. The best starting point is one of our free assessments.
What scientific or technical knowledge or capability existed at the start of your project that you planned to improve?
What is the overall advance in knowledge or capability?
What scientific or technological uncertainties did you face?
How did your project overcome these uncertainties?
Qualifying Activities & Costs
Key activity is resolving the scientific or technological uncertainties, this might be in a number of ways for example iterative development, prototyping, proofs of concept, or experimentation and testing. You can claim some costs that relate to these activities, but crucially not everything. You can also claim staff costs for some indirect supporting activities like project management, HR, and finance in support of R&D activities. The boundary of the R&D costs you can claim are those that relate to resolving the scientific or technological uncertainties you face. These differ in nature from the commercial project and the entire development project which might include routine work and elements not related to R&D.
Costs you can claim.
Each cost has specific “rules” around the correct treatment. Many are quite trappy. Common mistakes and misperceptions include:
- Dividend as a staff cost. Cannot claim dividend payments at all.
- Technical EPW/Subcontractor issues. Failing to handle EPW and subcontractors correctly, two different treatments, and various rules to consider.
- Treating money as a consumable. It would be nice but unfortunately no. Consumables have a specific meaning and rules.
- Hosting or Data purchases as software. Unfortunately, these are not treated as software under the rules and frequently claimed in error by those that claim without advice.
My experience of dealing with the government was just too much pain for small companies. Thank you Linda for all your hard work with our claim and successfully obtaining Tax Credits for us.
For the last four years Fretwell-Downing Hospitality has used the services of Terry Toms in support of the company’s application for Rand D Tax credits. During that period Terry has assisted us in gaining in excess of £200k in R&D tax credits.
We thought that we had our R&D Tax Credits well under control. However, RandDTax were able to show us exactly how to get everything we were entitled to, and when we were entitled to it. As a company investing heavily in developing every ambitious, intelligent customer service IT portals it was very rewarding to find that the UK government would give us tax credits in cash equal to roughly 30% of our R&D spend. This has been a great help and I would be very happy to recommend the RandDTax team to any company investing in innovation. Our normal tax advisers do a great job for us for most areas of tax, but when it comes making the best of R&D Tax Credits it pays to engage dedicated specialists.
IMSCAD Global Ltd provides complex solutions for graphical applications be it on premise, hybrid and/or cloud based. The support given by Linda and Paula at RandDTax from the initial consultation through to the successful conclusion of what was a significant six-figure additional deduction to offset our corporation tax (with the options of taking a five-figure payment directly from HMRC) was invaluable and we highly recommend this company.
Thank you all again for your help. It makes a big difference to the success of our small company!
We feel that the process works well and we truly appreciate your continued guidance and support for our claims.
Chief Executive Officer
RandDTax are very professional and it was quite an easy process with them. We hadn't used anyone for R&D tax before. Linda Eziquiel came to us and we’ve been really pleased. They do exactly what they said they would do from day one.
Director - Bailey Fabrications Ltd
What we were doing with RandDTax is pretty complicated and they were very good at walking us through what needed to be done and making it all clear. It helped us to release some capital that we wouldn't otherwise have been able to access. Linda and Paula 100% did what I had hoped for.
Director - Buzzing Lab Solutions Ltd
Working with RandDTax has helped us in getting our funding correct for tax purposes. They came recommended by our accountants. Linda was the first point of contact and we liked her personality and the way she came across, which was very professional. They’re very professional and for me they are very easy to deal with.
Director - Advanced Tooling Systems UK Limited
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