Carrying out research and development (R&D) can be an expensive part of developing your product/service and growing your business. So, finding a way to claim back tax against your R&D costs is a sensible way to reduce your costs and free up more cash for growth investment.
Expenditure on your R&D can be claimed against tax at a rate of up to 230% of the actual costs for small to medium-sized enterprises (SMEs). If your company is loss-making (and therefore has no tax liability) then a payable tax credit can be claimed.
Where you have qualifying expenditure that’s been incurred on R&D projects, allowable costs are increased by an additional 130% for tax purposes. So, for every £100 spent, £230 can be deducted from your profits when calculating tax – a helpful relief against your tax costs.
It’s possible that your company has been carrying out qualifying R&D work without even realising it. If you are, that’s a substantial tax relief that could be lost.
Come and chat to us about your recent development work. We’ll be able to let you know if your R&D work is eligible and can help you to prepare the complex claims documentation.
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