Preparing your R&D tax credit claim
HMRC’s guidance on claiming research and development tax credits, which runs to several hundred pages, puts most businesses off going it alone. Then there’s the risk of getting it wrong and either under-claiming what you’re entitled to or over-claiming and prompting an HMRC investigation.
Far better to use a specialist – someone who prepares claims day in day out, who keeps abreast of the latest changes in legislation (and HMRC’s interpretation of it) and who has a strong and proactive relationship with those responsible for approving your claim.
As the UK’s leading R&D tax credit specialist, Jumpstart has a proven track record of more than 4,500 successful claims. We know what to claim, how to claim and the many pitfalls to avoid.
And if you don’t ultimately qualify for R&D tax credits, you won’t owe us a thing.
What qualifies for R&D tax credit claims?
In a nutshell, you must be able to demonstrate to HMRC that the product or service you’re planning to include in your claim is truly innovative and, at a technological level, an advance on what’s currently available in the market.
According to HMRC, R&D for tax purposes is a project (or a component of a larger project), which “seeks to achieve an advance in science or technology [through] the resolution of scientific or technological uncertainty”. Encouragingly, R&D is still deemed to have taken place whether or not the project is actually successful; it’s the “seeking” that counts.
In summary, in HMRC’s eyes, you’re undertaking R&D when you’re: 1) overcoming technological uncertainties; 2) aimed at achieving an advance in technology; 3) which isn’t readily deducible by a competent professional.
If these conditions apply to your project, congratulations! You can claim R&D tax relief on its day-to-day costs and expenditure, including things like staff, subcontractors, materials, software and utilities.
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- Improvements to manufacturing processes or machinery (doing things faster / at a better quality / with reduced waste or improved safety)
- Ergonomics – ease of operation or suitability of manufactured products
- Computer models – for example, to evaluate stresses or fluid flow
- Using new, unproven methods of manufacturing existing products
- Developing ways of manufacturing new products
- Increasing process efficiency / safety
- Reducing emissions
IT & Software
- Incorporating new or untested technology into products, where experimentation is required to select the best implementation route.
- Testing new technology or programming languages, where there’s little information on their usage in the public domain
- Making existing products work on new platforms, where this involves overcoming technical problems that haven’t been solved before
Scientific & Technical
- Genetic analysis of agriculturally important organisms or phenotypes
- Development of protocols for the identification of disease agents
- Development of new biomarkers (ie molecules that can act as a flag for disease)
- Making improvements to the specificity or accuracy of test protocols.