Success in the mining industry thrives on research and development (R&D) – but many businesses don’t realise they could be claiming R&D tax relief.
Your clients could be missing out on tens of thousands of pounds to reinvest into their quarrying and mining businesses.
By offsetting expenses associated with R&D work, R&D tax credits greatly reduce the risks involved in expanding and developing a business, allowing quarrying and mining companies to strive for market growth and a competitive advantage.
The active pursuit of R&D activities and leveraging tax credits also helps mining businesses position themselves favourably in the marketplace.
Here’s what you need to know about R&D tax credits in the mining industry – and how a specialist R&D tax consultant can help you maximise your client’s claim.
Which R&D mining projects are eligible for tax credits?
For an R&D project to qualify for tax credits, the work conducted must aim to address a scientific or technological uncertainty.
Projects that could be eligible include, for example:
- Designing a new machine that can complete processes more efficiently and effectively than humans.
- Innovating new technology or methods to make mining and extraction more efficient, effective, and/or sustainable.
- Developing novel waste management techniques.
- Prototyping robotics to monitor the safety of mines in real-time.
- Improving the sustainability of mining and extraction methods.
- Developing advanced data analytics to improve mining operations.
- Creating new remote sensing technologies to identify mineral deposits.
Remember, a project does not have to be successful in order to be eligible for R&D tax credits. Indeed, since a company is more likely to have lost money on a failed project, claiming tax relief is even more important.
An expert R&D tax consultant can help you determine whether your client’s research project is eligible for R&D tax relief.
Which R&D mining expenses can be claimed as tax credits?
The wages and National Insurance contributions of quarry managers, production managers, lab analysts, and other engineers are likely to count as qualifying expenses.
These members of staff are likely to be considered as “directly and actively” engaged in R&D activities.
You can claim up to 100 per cent of the cost for third-party workers provided by an external agency if it is connected to your company, or 65 per cent if they are not.
Indirect costs may also be eligible, such as specialist cleaning staff and the costs associated with the recruitment of a specific person or skillset.
When a staff member works on qualifying R&D only part of the time, timesheets and records are essential to demonstrate that your client is only claiming for eligible work.
As well as personnel-related costs, other eligible R&D expenditures include:
- Data licences and software subscriptions.
- Consumable materials, such as fuel, electricity, water, and chemicals.
- Prototypes and testing.
- Costs spent on lowering and monitoring emissions from quarrying machinery.
Some costs, such as capital expenditure, don’t always qualify for R&D tax relief, so you should document how each cost you are claiming is eligible.
An R&D tax consultant can help you identify exactly what relief you may be able to claim for your client.
How can I help my mining client with R&D tax relief?
Accountants looking to claim R&D tax relief for their mining and quarrying industry clients need to submit a detailed report outlining their R&D activities, the technological challenges faced, and how the project aimed to overcome them.
While the process can seem complex, working with an expert in R&D tax claims can simplify the process and help ensure that all eligible activities are captured.
At randd uk, we provide expert R&D help for accountants to put together a watertight claims process that will minimise the chances of HMRC enquiries.
Our specialist R&D tax expertise, combined with your comprehensive knowledge of your client’s finances, will put your client in the best possible position to receive thousands of pounds in valuable tax relief.
Need help with your mining client’s R&D tax claim? Contact our R&D tax consultants today.
