The R&D tax credit scheme is an HMRC incentive created to inspire and reward limited companies for their innovation and development of their industry. The way that HMRC look at research and development is they look at your project and they look at the costs incurred. For example, developing a new food item and the way we cook it and prepare it ready for a menu, that could look at all the food that you’re brought into trialling the recipe and you might have been trialling the recipe numerous times. It also takes into account wages, could take into account some of the subcontractor costs, if there was any. It could take into account if there was any equipment bought for that project that will never be used again for anything else. So it looks at various different things, it looks at the project itself and then you come up with that cost, and you’ll get a percentage of that cost back. But that percentage may well change in the next budget next week, again, it’s one of those things where you really need to speak to a R&D tax specialist or your accountant.
R&D tax credits: which costs can I claim for?
- Direct staff costs
- Raw materials/ingredients
Most accountants have a rough idea on R&D tax credits when it comes to it, we’ve got someone in our firm that can look at it for you. It’s making sure the accountant is understanding the full project and the full costs involved in what can and can’t be claimed. It’s really important that you have a chat with someone, rather than just doing it all yourself and thinking you understand the rules.
The R&D part of HMRC website is actually quite self-explanatory and it’s fairly simply worded, which is a bit of an odd thing for HMRC, shall we say. They can often overword things and make things really difficult to understand, but their research and development information on their website is very clear. So if you’re not sure go there first, understand it yourself, if then you still need help, go and find an expert.
If you would like the JGBC team to help you claim your Research and Development tax credits, here is a step-by-step process for it below:
- 15min R&D discovery call – a call to discuss your business operations and check if you qualify for R&D tax credits.
- Accounts review meeting – our R&D expert will arrange a meeting with you to look into your accounts and determine what exactly can be claimed.
- Generating a claim report – we will create a detailed report for your claim ensuring HMRC understand your objectives and justification for your R&D claim.
- Submitting your claim to HMRC – once you are happy with your technical report, we will submit it to HMRC.
- Receiving your funds – it will normally take up to 6 weeks for you to receive your claim amount provided the claim is successfully processed.
Please note, JGBC has a no win no fee approach to R&D Claims and our fee is competitive at 25% of the realised relief compared to the industry average of 28-33%. Feel free to contact us any time to get more information about your R&D eligibility. With our expertise in taxation, we will also advise you how you can put the funds from your claim back into your business.