R&D Tax Relief (SME)

Research and development tax reliefs are available to companies that are undertaking activities which seek to achieve an overall advance in science or technology and aim to resolve scientific or technological uncertainty. Many activities are considered eligible for R&D tax reliefs and maybe something that your business has never deemed feasible before, including improving or enhancing existing products or process rather than starting from scratch.

There are many financial benefits arising from R&D tax reliefs:

• Small and Medium Sized enterprises “SMEs” * R&D tax relief provides an extra 130% deduction in addition to the normal 100% deduction, providing a total deduction of 230%
• The cash tax value of claims for tax paying companies is 25% of qualifying expenditure or £25 for every £100 of qualifying expenditure
• The cash benefit of claims for loss making companies is 33% of qualifying expenditure or £33.35 for every £100 of qualifying expenditure

89% of R&D tax relief claims in 2019-20 were made by SME’s (ref: HMRC) so it is definitely worth investigating your eligibility. There are now over 100 new R&D Inspectors at HMRC which illustrates the need to have robust supporting documentation in place to support your claim, which should also help to ensure timely processing by HMRC without query. Our team has over two decades of experience and can advise what is required to make a successful application.

*An SME is defined as a group/company with less than 500 employees, and annual turnover under 100m Euros, or Balance Sheet total of not more than 86m Euros.

Wilson Partners’ tax team can guide you through any tax claims that could be beneficial to the growth and development of your business. Get in touch.

Did you know? R&D tax reliefs are changing from April 2023. Register for our webinar to find out more.