SME R&D Tax Credits (Research and Development Credits for Small Businesses)
What is the SME R&D tax relief scheme?
The SME R&D tax relief scheme has been introduced to encourage innovation in science and technology.
Companies with significant research and development expenditure can make a total deduction of 186% of their qualifying costs from their yearly profit and can claim a payable tax credit of up to 10% of surrenderable losses if the business has claimed relief.
Is my business eligible for the SME R&D tax relief scheme?
SMEs that are eligible to claim tax relief will have less than 500 employees, as well as a turnover of under €100million or a balance sheet total under €86million.
Linked and partner enterprises will be included in this total and can affect your SME status. Calculating your R&D tax credits will be subject to the voting rights your business holds in another enterprise, in addition to the voting rights of your company which are held by other parties.
What can be claimed as R&D tax credits for SMEs?
SMEs can claim Corporation Tax relief on projects which meet the government’s definition of research and development.
Projects which satisfy the following criteria could be eligible for tax relief:
- Advancements in the field were achieved
- Scientific or technological uncertainty was present
- Your business tried to overcome uncertainty
- Your company demonstrated that a professional in the field could not identify a solution
How do I claim SME R&D tax credits?
SMEs can claim R&D tax credits by submitting a Company Tax Return to GOV.UK. Businesses can claim tax relief for up to two years after the end of an accounting period that the research and development expenditure relates to.
Whilst this can be a painstaking task, randd employs a team of specialist consultants capable of enhancing your claim and streamlining the process.
R&D Tax Credit Claim Template for SMEs
Several factors will be required by HMRC when considering an SME R&D claim. These include:
- Company name and number
- Number of employees
- Value of the claim supported by accounts for the relevant period
- Project details and summary of qualifying costs
- The field, advancement and uncertainties that were overcome
Other options for small business R&D tax relief
If an SME is applying for R&D tax relief for the first time, the company may qualify for advance assurance — a voluntary scheme that can be used as a guarantee for an R&D claim.
You can apply for advance assurance if you are an SME and have:
- Turnover of under £2million
- Less than 50 employees
- Not previously claimed SME R&D tax relief
How randd can help
Unlike most accountancy practices, at randd we can count upon a specialist team to process your SME tax credit claim, their day-to-day roles being to undertake the considerable research needed to ensure all boxes are ticked in the mission to maximise the amount of tax relief you receive.
We have the knowledge and expertise, built up over 15 years-plus in this industry, to identify and include every R&D activity that qualifies for inclusion within a claim – hundreds of millions of pounds have been claimed back as a result of our simplified, efficient procedures.
With input from yourself, we will compile a detailed technical report. That is the all-important document which explains the R&D activities undertaken by your company, the scientific or technical challenges the R&D addressed and how existing legislation was adhered to.
We have an unparalleled claim success rate as well as a proven track record of recouping up to NINE times more R&D tax relief than an accountant, alternative agent or a self-submission claim would.
To enquire about how randd can help you with your R&D tax credits claim, call 01332 409 711 or email claim@randduk.com