Research & Development (R&D)
Rewarding innovation
We are committed to collaborating with you throughout the claims process, ensuring that businesses of all scales receive funds for their innovative projects and can reinvest them back into their operations. Our streamlined procedure significantly enhances your likelihood of successfully obtaining your tax claim.
- We provide support to hundreds of businesses in filing R&D claims.
- Our team of dedicated and experienced R&D account managers is here to assist you.
- You can submit your claim and communicate directly with HMRC through our services.
- We offer competitive pricing packages for our R&D claim support.
What are R&D tax credits?
R&D tax credits serve as a government-driven initiative to stimulate innovation and enhance the economy of the United Kingdom. These credits have been accessible to all businesses since 2000, aiding in the advancement of exceptional products, processes, and services within the country.
By utilizing R&D tax credits, profitable businesses can potentially reduce their tax burden by up to 25% of their eligible expenses. Additionally, the tax relief can be equally advantageous for businesses operating at a loss, as they can receive a payable credit worth 33% of qualifying R&D costs.
Furthermore, even if a project does not achieve its intended outcome, the cumulative number of claims filed for R&D tax credits exceeds 300,000, amounting to a substantial £33.3 billion in tax relief.
How do companies apply for R&D Tax Credits?
If a company spends money on developing new products, processes, or services, it is eligible to receive R&D tax credits. This investment in research and development can result in either a cash refund or a reduction in the company’s corporate taxes.
The range of activities that can be considered as R&D is extensive and includes fields such as IT and telecommunications, medical, engineering, construction, packaging, and food and beverage, among others.
For your company to qualify for these tax credits, it must be engaged in a project that aims to advance science or technology. To demonstrate eligibility, you need to show that you have conducted research, testing, or analysis and have faced uncertainties along the way. Providing an overview of the project’s successes and failures can often be sufficient.
If you are claiming R&D tax credits for the first time, you can typically apply for tax relief for the last two accounting periods that have been completed.
What activities are included in R&D?
Creating methods for producing novel products while enhancing process efficiency and safety, thus safeguarding the environment and minimizing emissions. Enhancements to manufacturing procedures and machinery, which result in greater efficiency and improved product quality, lead to reduced resource consumption and enhanced safety measures.
Is my business eligible for R&D tax credits?
- Be the owner of a UK limited company that is subject to Corporation Tax.
- Have carried out qualifying research and development activities.
- Have spent money on these projects.
What costs qualify for R&D tax credits?
- Staff and salaries, employer’s NIC, pension contributions and reimbursed expenses.
- Subcontractors and freelancers.
- Materials and consumables (i.e., heat, light, and power) that are transformed by the R&D process.
- Some software.
- Payments of clinical trials.
Why Choose us?
Consolidating financial reports takes time and poses the risk of incorrect data. However, our expert team can easily combine financial information to provide you with a comprehensive set of statements, including parent and subsidiary revenues and expenses, consolidated balance sheet, profit and loss, stock summary, cash flow, and more.
Partnership with Apogee R&D
Apogee, established by a group of four colleagues and friends, aims to assist businesses of all sizes in securing funding for their innovative endeavors. Their objective is to introduce a fresh and client-focused approach to the R&D tax credit industry.
Apogee has built a stellar reputation for maximizing R&D tax credit claims in various sectors, including manufacturing & engineering, pharmaceuticals, software development, supply chain management, digital design, immersive technology, and food and beverage. Their expertise has enabled numerous SMEs across diverse industries to receive millions of pounds in financial support.
By offering outstanding service at a reasonable price, Apogee ensures that all eligible activities and expenses are accurately identified and presented to HMRC, while any ineligible ones are excluded. If you’d like to learn more, please don’t hesitate to get in touch with us.
Research and Development examples
A few examples of the type of project that might qualify for R&D tax relief:
Designing new ways of using different materials in construction.
Creating the prototype for an energy-efficient appliance or device.
Conducting investigations into novel medications and pharmaceuticals.
Now is the opportune time to invest in R&D.
The Government has unveiled a £22bn annual boost in tax relief for public research and development (R&D) endeavors by 2024-25, along with an additional £1.5bn allocated to all regions and nations. Contact us to learn more about our Research & Development service!
Which R&D tax credit incentive is right for my business?
The choice of incentive for claiming R&D tax credits primarily hinges on whether you operate as a small or medium-sized business (including start-ups) or a large company.
For SME’s:
- Having less than 500 employees
- Generating a maximum turnover of £86 million (€100 million) or possessing gross assets worth £74 million (€86 million).
Next step: If your business falls into this classification for R&D tax credit eligibility, you can avail of the SME R&D tax incentive. This incentive allows for a relief rate of up to 230%. Moreover, SMEs experiencing losses have the choice to relinquish some of those losses in exchange for a cash credit payable by HMRC.
Large company:
- 500 staff or more
- More than €100 million turnovers or €86 million gross assets
Next steps: If you are in this category, you can claim via the Research and Development Expenditure Credit (RDEC). Some SMEs may need to claim under the RDEC scheme in certain circumstances.
The RDEC scheme
SMEs are eligible for the R&D expenditure credit (RDEC) even if they are subcontracted by a large company or have received a grant or subsidy for their R&D project.
The RDEC credit, which is taxable at 13% of qualifying R&D expenses incurred by your company after April 1, 2020, can be utilized to settle debts regardless of your business’s profitability.
Here are the different types of costs that SMEs can claim:
1. Subcontractor expenses, often applicable for SMEs.
2. Expenditures on chemicals, materials, and batteries.
3. Software purchases specifically for project management or reporting on R&D projects.
4. Funding provided by large companies for independent research conducted by charities, the health service, or education authorities.
5. Participation of volunteers in clinical trials.
Is there any way we can assist your business by providing advice, aiding with innovation, or supporting your R&D Tax credit claim?
Get in touch with one of our experts!
Choose how you receive your R&D tax credit
If you are utilizing the SME R&D tax credit scheme, there are various alternatives available (outlined below) for receiving your benefits. The selection of the option will be contingent upon whether your business was generating profits or experiencing losses.
Cash rebate
R&D tax credits can be claimed for two accounting periods. If you’ve already paid corporation tax for a period, HMRC will refund you after amending your return.
Corporation tax saving
If you claim your R&D tax credit alongside, your profitable corporation may qualify for R&D corporation tax relief, which can reduce or eliminate your owed corporation tax.
Loss reliefs
HMRC grants R&D tax credits to loss-making companies, with the credit value determined by company regulations. SMEs can also carry R&D losses forward or backward in their profits.
A cash credit
As an alternative for losing companies, HMRC offers cash payments for surrendering R&D enhanced losses. This option can generate up to 33p profit for every £1 spent on R&D, providing cash flow support.
Our corporation tax services
In general, Limited Companies are required to submit their Corporation Tax Return (CT600 form) to HMRC within 12 months, regardless of whether they incurred a loss during the Accounting Period.
We understand the challenges involved in managing a small company. Our services assist with accounts and tax preparation for sole traders, small businesses, start-ups, and limited companies.
The advantages of utilizing our accounting services encompass competitive monthly pricing (with no hidden fees), dedicated support from a client account, and access to top-notch accounting systems (Xero, Quickbooks, and Freeagent) and apps.
FAQs
Are there any requirement if I have more than one R&D project on the go?
If you are currently managing multiple projects simultaneously, it is essential to provide information on all of them. If you have one to three projects running concurrently, please ensure to include detailed descriptions of each project. However, if you have four or more projects, you should provide detailed descriptions for at least three projects, while ensuring that the combined costs of these three projects account for 50% or more of your total qualifying R&D costs.
Further requirements if you have more than one R&D project
- The start and end dates of the accounting period relating to the R&D activity – these should be the same dates as the period covered by your CT600 return
- Your Unique Taxpayer Reference (UTR) number
- Details of your qualifying R&D costs
How much can I claim back?
- This depends on the size of your business. If you are an SME you can claim up to 33% of your total R&D costs. If your business is profit-making this is seen as a Corporation Tax reduction, or if the business is loss-making then this is in payable cash credit and is not taxable. A large company is able to apply for 13% back through the RDEC scheme and this is awarded in the same way as SMEs.
Can charities or sole traders claim for R&D tax relief?
No – Only companies liable for Corporation Tax can claim through the scheme (limited companies).
How often can I file an R&D tax credit application?
You can file one R&D tax credit application for each financial period in which you trade, provided eligible research and development activity continues to be undertaken by your company. Submissions can be revised alongside your CT600 for the two prior fiscal years, should you believe qualifying expenditure has been omitted.
When can I submit an application?
You can submit an R&D tax credit application after one period of trading. Following this, a claim can be submitted each financial period.