Understanding how R&D can benefit your business and how to conduct an R&D tax calculation accurately can seem complex. With evolving HMRC legislation and different schemes applying depending on your business size and accounting period, calculating an eligible claim isn’t always straightforward.
That’s why working with our R&D tax credit specialists can make a difference. Our in-depth knowledge of the latest legislation, qualifying expenditure and claim optimisation strategies means we can help you unlock up to 9x or even 12x more value than if you navigated the process alone.
Throughout this guide, we’ll walk you through:
- What R&D is & how your business can benefit
- How to calculate R&D tax credit
- R&D tax credit examples
- How Randd can help you maximise your claim
| Did You Know?
At Randd, we have helped over 5,000 businesses claim back over £250 million in R&D tax credits, with an average claim rate of £50,000. Explore our case studies to see how we have helped innovative businesses optimise their claim value, or contact us today to secure maximal R&D tax relief for your business! |
What Is R&D & How Can It Benefit My Business?
The UK government introduced Research and Development (R&D) tax relief in 2000 to encourage innovation among Small and Medium-Sized Enterprises (SMEs). A separate scheme for larger companies was launched in 2002.
Since then, billions have been injected into innovative businesses through R&D tax credits, helping them develop new products, improve processes, and overcome difficult technological challenges.
Below, we’ve outlined the types of businesses that can claim R&D tax credits and the key benefits of this scheme in supporting your innovation efforts:
| Types of Businesses Eligible | Benefits of R&D Tax Credits |
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| Unsure if your company qualifies for R&D payable tax credits?
Explore our R&D eligibility guide for sector details, qualifying costs & eligible R&D activities or visit our FREE R&D tax credit calculator to discover how much you could claim back! |
How To Calculate R&D Tax Credit
Calculating your R&D tax credit can seem complicated, but breaking it into clearer steps can simplify the process. Below, we’ve outlined the key stages involved in an R&D claim calculation so you can understand how to calculate R&D tax credit accurately and maximise the value of your claim.
| Step | Action |
| 1. Identify Qualifying R&D Activities | Direct staff costs, consumables, software, utilities – explore our guide to discover more on qualifying costs |
| 2. Total All Qualifying Costs | Sum up all eligible R&D costs – this gives your qualifying expenditure. |
| 3. Calculate Additional R&D Relief Deduction | Multiply your qualifying expenditure by 86% – this gives the additional reduction you can make from taxable profits. |
| 4. Calculate Enhanced Expenditure Amount | Multiply your qualifying expenditure by 186% – this is the amount you can deduct from taxable profits. |
| 5. Estimate Benefit Using An Online Calculator | Use our FREE R&D tax calculator to discover how much you could claim. |
While this step-by-step guide allows you to gain a quick estimate of your R&D tax claim eligibility, you can often miss key details and overlook eligible costs. To maximise your R&D claim and ensure compliance with HMRC guidelines, working with a specialist is crucial.
At Randd, we have provided specialist R&D tax relief services for over 15 years. Our experts are experienced in optimising claims for SMEs and large companies, navigating complexities and ever-changing HMRC guidelines, so you can unlock the full value of your R&D tax relief.
| Want to learn about the dedicated tax specialists behind your R&D tax credit claim?
Meet The Experts who will work alongside you and discover how our personalised support and strong track record of success can help you receive the greatest benefits for your company’s innovation. |
R&D Tax Relief Example Scenarios
Understanding how R&D tax credit schemes work in practice can make it easier to see how they could benefit your business. Below are a few R&D tax claim examples that show the range of activities and costs that can form a successful R&D claim.
R&D Tax Credits Example 1: Manufacturing Company
- Business Activity: Developing a new manufacturing process to improve efficiency and reduce waste.
- R&D Qualifying Activity: Overcoming technical uncertainties around materials and machinery integration.
- Eligible Costs: Staff salaries, materials used in testing, utility costs for R&D facilities.
- R&D Tax Claim Benefit: Substantial cash credit or Corporation Tax reduction.
R&D Tax Relief Example 2: Software Development Company
- Business Activity: Creating bespoke software to solve a complex industry-specific problem.
- R&D Qualifying Activity: Developing novel algorithms and integrating new technology platforms.
- Eligible Costs: Software licenses, salaries, subcontractors (outsourced developers).
- R&D Tax Claim Benefit: Significant tax relief to offset development costs and reinvest.
R&D Tax Claim Example 3: Food & Drink Manufacturer
- Business Activity: Developing a new product line with improved nutritional value.
- R&D Qualifying Activity: Reformulating recipes to meet new dietary guidelines while maintaining taste and texture.
- Eligible Costs: Ingredients, materials, salaries, utility costs for trial production runs.
- R&D Tax Claim Benefit: Tax credit helps recoup a portion of product development costs.
Get More From Your R&D Tax Credit Claim & Partner With Randd
Maximising your R&D tax credit claim doesn’t have to be complex or time-consuming. By partnering with Randd, you gain access to specialist expertise that ensures your R&D claim calculation is accurate, comprehensive and fully optimised, with a simplified claim process from professionals.
Our expert team understands the nuances of HMRC legislation and knows how to uncover eligible costs you might otherwise miss, helping you claim more R&D tax relief while avoiding the stress of navigating the process alone.
Ready to calculate your R&D tax credit and see how much you could claim? Contact Randd today on 01332 409 711 or email [email protected] – let our experts help you unlock the true value of your innovation.
