Did you know that companies are claiming up to 33% of their research and development expenditure back as a tax credit?
Boost your cash flow without diluting your shareholding in your company, and continue your investment in innovation by claiming a R&D tax credit. Think differently.
What is the average R&D tax relief claimed in your industry?
Could you have missed this valuable source of funding for your SME?
Find out below what each sector claims on average.
What is R&D tax relief?
The UK Government’s Research and Development Tax Relief scheme is a way to encourage and reward companies that are investing in innovation.
How? If your company is profitable and eligible, you can benefit from a reduction in your company’s tax bill. Not yet profitable? Don’t worry! The UK will reimburse your R&D expenditure as a cash credit of up to 1/3 of the R&D expenditure. R&D tax credits can be claimed retrospectively for up to two years after the accounting year-end date.
What qualifies as innovation? For tax purposes, R&D takes place when you are creating something that will advance the overall knowledge or capability in a field of science and technology. In simple terms, if you are solving industry problems, creating new software, process or materials or anything that could be considered Intellectual Property, you qualify.
What costs qualify?
All industries, developing or improving new products, processes, or services, can be eligible for R&D tax credits.
There are many types of projects that qualify, but most projects will involve the development of new technology or services or novel applications of technology to scientific problems. If your company is taking a risk in attempting to resolve a scientific or technological uncertainty, then there is a good chance you are also carrying out R&D. Most importantly, the projects do not need to be successful to qualify. Once a scientific or technological problem has been identified, and a way to fix it sought, the work towards this goal will be eligible regardless of the result.
Eligible expenditure could include staff costs, agency workers, subcontracts, consumables, and/or software. We’ve found that many companies don’t understand the scope of things that may qualify as costs. This prevents companies from claiming R&D tax relief on them, and, as a result, potentially losing thousands of pounds or more in R&D tax relief. We will help you navigate this! Our industry sector R&D specialists know exactly what to look out for and will be sure to include it in your claim.
How to claim?
R&D tax credit claims are made through company corporation tax returns, with SMEs being able to claim up to 33p for every £1 spent.
A business can prepare and submit a claim by themselves. However, you must ensure that you understand exactly what type of expenditure qualifies under the R&D relief scheme and are able to present it in a way that satisfies HMRC. If not, the company runs the risk of their claim being queried or refused.
Over the years, we have perfected a template at Novel that is compliant with HMRC requirements. Each report is written by our team of sector R&D specialists and accountants that know exactly how to shine a light on your innovative projects to secure the largest possible claim.
Our team are experienced in claiming for a variety of clients, across a wide range of industries all over the UK. While you push the boundaries of science and technology, we push the boundaries of R&D tax relief so you can get rewarded for your innovation.
Our Winning Approach
1. Discovery and Research
Answering a short questionnaire may seem efficient, but won’t result in a particularly valuable claim. Our goal is to gain the maximum financial reward for our clients and to do that we will work with as many team members, systems and records as you have in place to identify all potential projects that may qualify for the R&D tax scheme.
2. Analyse and Develop
Once we have gathered the relevant research, our sector specialists will write a thorough technical report, using our unique Novel template that is formatted in an HMRC compliant way to minimise the risk of a claim enquiry. Thus, speeding up the time it takes to get your money.
3. Financial Analysis
Did you know that the majority of companies only claim back a fraction of their eligible costs? We want to avoid that, which is why our R&D specialists are expertly trained to identify all possible eligible costs to maximise your claim value.
4. Submit
We will prepare and submit your claim, to HMRC. Alternatively, we can work with your accountants or provide instructions for submission.
5. Collect
If your business is profitable and HMRC approves your claim, you will receive your benefit immediately! For loss-making businesses, the money will typically be paid directly into your bank account within four to six weeks.
Want to see this in action?
Case Study - 3D Mapping Company
The Company approached us to help them apply for Research and Development (R&D) tax relief. They had invested heavily in developing innovative technology and needed the help of the R&D specialists at Novel to help them maximise their claim value.
Following our initial meeting in June 2019, our R&D sector specialists spent a couple of afternoons with the development team trying to understand the different R&D projects. By taking the time to talk to the team members and do a workshop at the business premises, we were able to identify an extensive list of potential projects that could qualify for the R&D tax scheme.
We then began collating our findings into a detailed report that systematically explained each project the 3D Mapping Company was doing, and why it was innovative and qualified for R&D tax relief. We finished calculating the sizable financial package for the company and presented it to our client. Once the 3D Mapping Company was satisfied with the report, we submitted all the details to HMRC.
Within six weeks, HMRC had processed the claim, and the company received the tax credit of £500,000 by bank transfer only a few days later, with no further questions asked.