R&D Tax Relief

What is R&D Tax Relief?

You can claim up 225% tax relief on qualifying research and development expenditure if your company has less than 500 employees and either a turnover of less than £100 million or gross assets of less than £86 million.

Despite its name, R&D Tax Relief isn't just for 'blue skies' research projects. To be eligible your business has to undertake technical development to deliver improved products, processes, devices, materials or services. All companies, large and small, can claim if they undertake qualifying work.

  • Small and medium-sized companies can benefit even if they are loss making - they can surrender the R&D tax losses for cash.
  • Development projects can qualify for a claim even if they are funded or subsidised.
  • The development does not need to be successful - abortive or failed projects can be included in the claim.

Some facts and figures

  • The additional tax relief can effectively deliver a subsidy of: 25% to 31% of qualifying costs for small and medium-sized companies; or 7.2% of qualifying costs for large companies in most cases.
  • Small and medium-sized companies reporting tax losses can 'cash in' their R&D tax losses for a repayment of PAYE and National Insurance Contributions previously paid.
  • A loss-making company with £10,000 of qualifying R&D expenditure could effectively claim a cash repayment of £2,475.
  • Many companies with less than 500 employees now qualify for the more advantageous tax breaks for small and medium-sized companies.

Unlike many grants and subsidies, the tax saving/cash repayment arising from the R&D Tax Relief does not need to be allocated against specific expenditure. Your company is free to spend the money however you like - with no strings attached.

Don't waste time in finding out if you are eligible to claim. Contact Bradshaw Grice today.