Tax Consultancy
R&D Tax Credits for Financial Services and Insurance Companies
If you’re a financial services firm seeking to recover funds via R&D tax credits, you’ll want to get in touch with the specialists at Wilson Partners. The award-winning accountancy firm has already successfully claimed back over £5 million in R&D Tax Relief Claims.
The financial and insurance industry has undergone a period of dramatic growth and digital transformation in the last ten years, and innovations are becoming standard practice for ambitious firms. However, some businesses have lagged behind due to concerns over cash-flow stability and questions about the political landscape of the UK. Consequently, research and development for some firms has taken a backseat.
In order to change the approach of the UK Financial and Insurance sector, the Government has created special taxation relief for businesses willing to explore innovation. These Research and Development (R&D) Tax Credits have broad qualifying criteria and are designed to be as financially accessible as possible. Businesses that qualify can benefit from up to 21.5p payback on £1 invested in their projects, as well as getting a substantial reduction in corporation tax so every finance and insurance business should consider making a claim.
What exactly can qualify for R&D Tax Relief for Financial Service organisations? Anything from identifying technological improvements, creating APIs for client software integration or automating manual and repetitive tasks using robotic process automation (RPA) are all examples, but this is by no means an exhaustive list. To find out if your activity is suitable, it’s best to enlist the help of an R&D specialist to support your claim.
This is where Wilson Partners come in. By usually taking a no-win no free approach, we give you the chance to explore R&D Tax Credits without any risk. One FS client we worked with in 2019 reclaimed £650k for a project which is likely to be repeated in the coming years.
Over 50% of R&D Claims are rejected by HMRC because of a lack of clarity. Your Financial Services firm can’t afford to miss out due to a technicality. To ensure the best chance of your application being successful, contact Wilson Partners today. And if you want to find out more about how other Financial Service and Insurance firms have benefitted from R&D Tax Relief, download our sector whitepaper here.
Download our free guide to R&D tax reliefs
- What is R&D?
- What companies are benefiting?
- How to claim?
Please complete our form to download the guide.
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See how much relief you could receive using our calculator for SMEs
Most companies, including start-ups, fall into the SME category and can claim back up to 33p for every pound spent on R&D. Even if your business is loss-making you could receive a cash benefit. See how much you could potentially claim in our calculator below, simply select whether you’re profit or loss-making and select the amount of R&D investment – you could be pleasantly surprised.
Find out what you might be eligible for using our simple calculator below.
Please note our calculations are based on the rates for R&D activity taking place from 1st April 2023
Your company's financial position:
- Making a profit?
- Making a loss?
Annual R&D spend:
- £50,000
- £250,000
- £500,000
- £1,000,000
- £50,000
- £250,000
- £500,000
- £1,000,000
*To qualify as R&D Intensive more than 40% of business expenditure must be on R&D, changing to 30% from 1st April 2024.
Is my business eligible?
When putting together an R&D tax credit claim, we look for the following types of R&D expenditure to assess whether they qualify:
- Expenditure on staff including salaries, employer’s NIC and pension contributions.
- Expenditure on subcontractors and freelancers.
- Expenditure on materials and consumables including heat, light and power that are used up or transformed by the R&D process.
- Expenditure on some types of software.
R&D FAQs?
A government backed tax incentive scheme whereby companies can receive benefit for expenditure on developing new products, services and processes.
The tax definition very different from the accounting definition and is much broader. The government define R&D for tax purposes as work carried out that seeks to achieve an advancement in science or technology where the chance of success is uncertain.
As you would expect, highly technical projects qualify for R&D tax credits but due to the broad definition, qualifying projects can also be as simple as merging two IT systems or improving a production process. So it’s important to review all projects.
Businesses spending money on creating or appreciably improving existing products, services or processes which incorporate or represent an increase in overall knowledge or capability in a field of science or technology could be eligible for a sizeable reduction in their Corporation Tax and / or a cash payment to reward their investment. Relief for SME’s is currently equivalent to between 21.5p and 18.6p for every £1 of qualifying expenditure depending on profitability.
Employee and subcontractor costs generally make up the majority of an R&D claim. Certain consumables and a portion of admin costs can also sometimes be included. It is important that staff time spent on projects is recorded accurately to increase the robustness of the claim.
Companies have up to two years after the year end to make a claim.
We can work with your technical teams to identify the qualifying work carried out by the company, and then work with the finance team to identify the costs and make sure we maximise the consumables and indirect costs.
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