Businesses that are eligible for R&D tax credits. To qualify for R&D tax incentives, you must: be a Registered company in the UK Have conducted qualifying R&D activities Have invested or spent money on R&D activities. Who qualifies for R&D tax credits? R&D is not restricted to any particular sector. It occurs in everything from bread making to engineering, chemical industries, to construction or digital development. To see if your business qualifies for R&D tax credits Contact us at info@phoenixrnd.co.uk for a free no obligation strategy session.

Businesses in the UK who spend money on innovating or developing new products, business processes or services; or enhancing existing practices or products, are eligible for R&D tax relief. If your business is spending funds on innovation you can claim R&D tax credits to receive cash payment and/or Corporation Tax reduction (depending on your profit or loss). The scope and support of R&D tax credits is incredible, in fact the schemes are in practice in almost every sector/industry in the UK, however the awareness is limited. If you are claiming R&D tax credits for the first time, you can typically complete the claim for the last two years of your accounting period.

The HMRC R&D project eligibility criteria is quite broad. Whatever sector or size of your business, if your company is investing in attempting to resolve scientific or technological uncertainties, then you may be conducting R&D qualifying activities. This may include either: creating or developing new products, services or processes modifying or changing existing products, services or processes. If the outcome of your project is uncertain, or not sure whether the result of the product development, process or service creation will be successful, then you are attempting to resolve technological uncertainties and thus qualify for R&D activities.

There are two types of businesses as defined by HMRC, (i) SME (ii) Large companies. Large companies, if the number of staff is more than 500 or turnover exceeds £100 million, these businesses fall into this category. Small and Medium Size Businesses (SMEs) The number of staff is less than 500 and the turnover is less than £100 million, these businesses fall into this category. Most businesses, including start-ups fall into this category

How much is an R&D credit claim worth? The R&D tax credit claim depends on your R&D spend. You would need to identify the qualifying expenditure and calculate it based on the following rates. If the business is making a profit, then the R&D tax credit for qualified expenditure is 25% and 33% if the business is making a loss. You (as an SME) would be able to claim 33p for every £1 R&D qualified expenditure. The average claim for an SME is £54K (2018-17).