Research & Development (R&D) Tax Relief

HM Revenue & Customs recently published statistics for the Research & Development Tax Relief for companies and these make shocking reading. In 2009/10 the number of companies claiming was only 9,410, of which 7,410 claimed under the very generous SME scheme which allows for an additional deduction against taxable profits of 125% of the qualifying R&D expenditure. Loss making SME companies can surrender tax losses for a non-taxable cash refund.

There are still many companies not making a claim for this relief, and the same misconceptions remain:
• We are not doing R&D - many companies do not initially realise that their project is R&D – it may even be a process and not an end product
• Claiming the relief is complicated - not if you seek good advice
• The costs of claiming outweigh the benefits - this is rarely the case
• We cannot separately identify costs - HMRC does not expect the company to reinvent its accounting records to make a claim and will accept some elements of estimation
• We received a grant towards R&D, we cannot have the tax relief too - this is by far the biggest misconception. The receipt of a grant may affect how much additional tax relief the company can claim but you can have both!

Nigel Holmes, Corporate Tax Director at Armstrong Watson, has been involved in R&D tax relief claims since their introduction in 2000. He says “During these difficult economic times, this generous tax relief can be used to provide tax free cash for loss making R&D companies, or substantially reduce a tax liability, and I encourage all companies in science or technology sectors to consider claiming and speaking to an expert on the relief. I have seen plenty of successful claims in IT, manufacturing, engineering, pharmaceuticals and nuclear sectors, and am proud to say that the proportion of Armstrong Watson clients claiming the relief exceeds the national average”.

To contact Nigel Holmes about R&D Tax Relief please call 01228 690200, email nigel.holmes@armstrongwatson.co.uk 
or go to www.armstrongwatson.co.uk/r-and-d

 

If you like this article and would like our FREE updates sent straight to your inbox then subscribe to our monthly newsletter

Subscribe

Get in touch

To find out more about how we can help you or your business, call us on 0808 144 5575 and speak to a member of our team. Alternatively use our contact form to send us a message or arrange a callback.

CALL 0808 144 5575

or

Contact Us

All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.

Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.

Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW

Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW