R&D tax relief for companies in the security and electrical sector is an important benefit, providing vital funds that can be reinvested into your business.
Security & Electrical
R&D Tax Credits for Security & Electrical
Many business owners in this industry are unaware they qualify for R&D tax credits or are not fully conversant with what is required to maximise this government initiative that rewards innovation.
But at randd, our vast experience of knowing the criteria for an eligible claim means we are ideally placed to manage your submission.
R&D in the security industry
Security and electrical is a fast-moving sector where new technologies must be incorporated into products that make the design of buildings and their internal systems safer.
Rising crime rates and the desire to reduce insurance premiums have led more homeowners and commercial businesses to upgrade their security systems, contributing to the sector’s growth and increasing the need for innovation.
Among the technologies that are continually being developed within security system services are biometrics, fingerprinting and facial recognition, all of which require essential research and development.
In the electrical sector, the Electricity at Work Regulations 1989 critically govern the industry and mean that all businesses, large or small, must adhere strictly to safety standards, inherently reducing occupational risk.
Ongoing investment into the UK’s road and rail networks, both of which require extensive electrical infrastructure, will mean continuous R&D activity, while electrical maintenance and new innovations are also fundamental in manufacturing.
Contractors and technicians need more advanced tools and devices to successfully repair and maintain electrical equipment.
What qualifies as tax credits for R&D security projects?
Your R&D activity does not need to be successful to qualify for tax credits. Provided you have tried to remedy a technological or scientific uncertainty for which there has been no previous solution, your attempt could be eligible.
The types of project that could qualify include:
- Advancing existing technologies with novel means
- Improving cost efficiency and quality of products
- Reducing carbon footprint and developing processes and products to become more energy efficient and reduce wastage
What costs are covered in tax credits for R&D security projects?
A proportion of the following costs qualify for R&D tax credits in relation to staff working directly on the R&D project:
- Wages/salaries
- Class 1 National Insurance contributions
- Pension fund contributions
- Payments to administrative or support staff (e.g. specialist cleaning staff) who work to directly support a project
- Payments made to subcontractors and external workers
- Payments made to clinical trial volunteers
- The cost of materials consumed
- Light, heat and power costs
- Data licensing and cloud computing costs
- Software licence fees
Eligibility for claiming tax credits for R&D security projects
R&D tax credits claims can be made by security and electrical firms that meet the following criteria:
- UK limited companies that are still trading
- Companies of all sizes in all sectors
- Both profitable and loss-making businesses
Your company needs to have a set of financial accounts, a qualifying R&D spend and be subject to Corporation Tax.
For claims covering accounting periods up to the end of March 2024, the SME and RDEC schemes for R&D tax credits continued to apply. SMEs are classed as start-ups and established businesses with fewer than 500 staff and a turnover of under 100 million euros.
The RDEC scheme applies to large companies, which are defined as having more than 500 staff and generating turnover greater than 100 million euros.
This changed for accounting periods that began on or after April 1 2024 when the SME and RDEC schemes were merged into one, apart from loss-making SMEs that are categorised as ‘R&D intensive’ – which means more than 30% of their total expenditure is incurred on research and development.
The figure of 30% is a reduction from the previous 40% and SMEs which cross that threshold in terms of their expenditure on R&D qualify for a new ‘SME intensive’ scheme.
Successful R&D security projects
An Oxfordshire-based robotics company has received £150,000 in R&D tax credits having enlisted the help of randd.
This growing company has developed scalable, flexible and fully customised robotics for the target markets of nuclear research and decommissioning, oil and gas, infrastructure survey, first responder and security.
Research and development is vital to the company’s growth plan as it continues to develop further the technical aspects of the ground-breaking technologies associated with its products. This technologically challenging field is constantly progressing, and R&D security and electrical tax credits enable innovation to continue and achieve advanced breakthroughs.
Expert support claiming tax credits for R&D security projects
If you need any help with your R&D security tax credits claim, randd is ideally placed for we have accrued vast experience advising clients in the security and electrical sector and recouped thousands of pounds in tax.
Call us on 01332 409 711 and we will be happy to assist you with understanding whether your R&D work qualifies for a claim and how to proceed.
