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R&D Tax Relief - Frequently Asked Questions

At Cliffen Consulting we are here to help. We've pulled together some of the most frequently asked questions our customers have asked us.

  • In 2000, the government introduced the Research and Development relief to inspire businesses in the UK to invest and improve the fields of Science and Technology. In this strategy, businesses from different sectors are given the chance to claim back some of their spendings for advancing innovations.

  • UK companies can be eligible for this scheme if they have certain R&D projects that are running and designed to advance scientific or technological processes, products, or services.

  • You can take our 5 minute eligibility survey. HERE

  • Complete the survey HERE
  • If you are eligible we can have a Phone / Zoom consultation. A member of our expert team will have a chat with you regarding your business as well as its potential qualifying R&D activities.
  • Preparing your information – After the call, we are going to gather all your information together. We are an expert in working in this area. In other words, we know what HMRC are searching for, so we can guarantee you that we have all the things they require to make the claim successful.
  • Submitting your claim – We are using a comprehensive service which is comprised of the technical write up so we can guarantee that your claim is submitted accurately. You don’t have to deal with HMRC since we are going to do this on your behalf.
  • Obtaining approval – Commonly, claims are approved and paid within six weeks. You will only be charged if the claim is successful.

HMRC operates two types of tax relief based primarily on the size of your company. There are two schemes.

  • SME Scheme - For SMEs, they can claim approximately 14-33% on any costs provided that it is eligible.
  • RDEC Scheme - For Larger companies (Over 500 employees) they can claim a credit amount of up to 13%.

  • Yes, the Research and Development Scheme cannot be used by all businesses in the UK. You can only claim it if you are a limited company.
  • If your business is doing lots of research and development, then going limited can be very advantageous.

  • Yes, only those companies that are subject to Corporation Tax such as limited companies are eligible to claim Research & Development Tax Refief.

  • R&D Tax Rates can vary depending on the size of your company. SMEs are classified as companies that have less than 500 employees and are allowed to claim a higher percentage compared to bigger companies.
  • If you have less than 500 employees you can claim under the SME Scheme
  • SME claimants typically receive between 18-33% of their R&D expenses back from a claim.
  • Companies with more than 500 employees can claim under the RDEC Scheme
  • RDEC claimants typically receive up to 12% of their R&D spend back from a claim.

  • You are allowed to make a claim for any eligible costs as long as it is made during the previous two years of your company’s accounting years.

In order for your Research and Development projects to qualify, there are certain criteria that should be met.

  • Any activities that directly contribute to achieving that advance through the resolution of scientific or technological uncertainty are considered R&D.
  • Extend knowledge in a specific area of science of technology.
  • Developing a new material, device, product or service.

The R&D definition is deliberately broad. It allows for companies of any size and from any sector to apply for funding wherever those companies are taking a risk by attempting to ‘resolve scientific or technological uncertainties’.

  • Absolutely, the concept of R&D is to reward businesses for their innovation projects, not only the completed and successful ones.

  • Yes, keep in mind that the purpose of this scheme is to motivate businesses to generate projects for innovations. It’s all about the investments made by companies in developing new or improving existing processes, products, or services.

  • There are three different ways that you can receive payment for your R&D Tax credits. Either through a Corporation Tax rebate, cash credits, or an expenditure that you may take forward against prospective profits.

  • What we need from you is just a copy of your CT600 and accounts.

R&D Tax credits can be paid in three different ways: Cash back, a Corporation Tax rebate or as an expenditure which you may take forward against future profits.

  • After we receive all the necessary information, we will submit your claim right away within 1-2 working days.
  • If your business recorded a profit for the period you are claiming R&D expenditure for, your overall Corporation Tax due on your account will be reduced by the amount of tax relief awarded. If you have already paid your bill for the period, you will receive a repayment.
  • If your business made a loss during the period of your claim, you will receive your tax credits as cash paid into your bank account.
  • Once HMRC has received the documents that we’ve submitted, then most likely the payout will take within 4-6 weeks.

R&D Tax credits can be paid in three different ways: Cash back, a Corporation Tax rebate or as an expenditure which you may take forward against future profits.

  • Receiving a grant or subsidy doesn’t stop a company from making a claim for R&D tax credits or relief. Some grants limit projects to be claimed only under the RDEC regime, whilst others still keep the doors open to make a claim under the SME regime.
  • We will work out whether a particular project qualifies under the SME or RDEC regime depending on type type of grant or subsidy a company is in receipt of and will calculate the R&D tax credits and tax relief available to your company.

R&D Tax credits can be paid in three different ways: Cash back, a Corporation Tax rebate or as an expenditure which you may take forward against future profits.

  • This is possible. However, most likely this is just a request for more information and we can handle this on your behalf.
  • We have a 100% success rate so even if HMRC will get back to us to ask a few questions, we have never encountered a claim that was rejected.
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