R&D is a tax relief you can claim from HMRC for technical development and research projects and it well worth looking into if you think you could be eligible.
We hooked up with Simon Bulteel from Cooden Tax Consulting to get his top tips for R&D as its an area that is definitely worth exploring, but not one of our specialisms!
1 – the eligibility criteria are only, you have to be a limited company and a viable business when you submit your claim.
2 – you don’t have to have spent hundreds of thousands of pounds or have a laboratory!
3 – you do have to have been performing a project, and that project has to be scientific or technological in nature
4 – you don’t have to have completed the project yourself, you can subcontract out some or all of the work
5 – your project has to be challenging for a competent person in the field, the solution can’t be obvious or be googled! If your project was completed first time, the solution was either obvious or you were very lucky, but which ever way, you probably won’t be eligible.
6 – the more difficulties you faced, in completing the project the more likely it is your project will be eligible, if it failed completely those are the best projects for demonstrating uncertainty, but probably not best for your business in the long run, so don’t set out to fail.
7 – document your thought process as soon as possible, keep track of all the things that went wrong and all the decisions you had to make. It will make identifying the technical challenges a lot easier. If you are just starting a project document now, if you’ve completed a project, do it yesterday!
8 – you can prepare the claim yourself or with your accountant, in fact if you’ve spent under £10k it’s probably best. The more you’ve spent the more “value” a genuine expert can bring to your claim! Beware there are some unscrupulous people out there!
9 – Despite what some of those unscrupulous people might tell it’s not “free money and claiming is not “risk free”, if HMRC decide your claim is spurious, they can impose penalties and interest and in the worse cases have prosecuted people for tax fraud, but this is only where millions of pound have been obtained!
10 – you can go back 2 tax years, so start looking at what you did 2-3 years ago now, and start preparing!