Russell Flynn ACA explains how you can claim Research & Development (R&D) tax credits even if you’ve been awarded a grant.\u00a0<\/h2>\n
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Have you received grant funding as a form of raising finance for your business?\u00a0<\/p>\n
Have you also checked if your projects and expenditure could qualify for R&D tax credits<\/span><\/a><\/span>?\u00a0<\/p>\n If you’ve received grant funding<\/a><\/span> then don’t automatically think that this precludes you from obtaining the potential tax benefits available through the R&D work your business may have conducted. They are not mutually exclusive! This means you should still investigate to see if a R&D claim is a viable option.\u00a0<\/p>\n Whether a grant you have received will impact on a R&D tax claim will usually depend on:<\/p>\n In this blog post we explain what R&D is and who it applies to, how notified state aid and non state aid work, and the interaction between such grants and whether your business can potentially benefit from R&D tax relief.\u00a0<\/p>\n The R&D tax relief program was put in place to promote scientific and technological advancements in the UK. If your organisation engages in eligible R&D activities<\/a><\/span>, you can potentially reclaim surrenderable losses back through a tax refund if your business isn’t profitable.<\/p>\n<\/div>\n If less than 40% of your total expenditure from 1 April 2023 to 31 March 2024 was on qualifying R&D, then you can claim 10% of those specific losses back. If R&D costs were greater than 40% of all expenditure then the refund increases to 14.5%. From 1 April 2024 the SME scheme<\/span> means this requirement dropped to 30% of all qualifying expenditure. Above this level and the 14.5% refund applies.\u00a0<\/p>\n Alternatively, if your enterprise is profitable, the R&D expenditure is applied as a relief by reducing your corporation tax liability. If your business is eligible then for every \u00a3100 spent on qualifying R&D, you can deduct \u00a386 from related taxable profits, that’s an enhanced deduction of 86% on the investment in R&D projects.\u00a0<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n Any business, regardless of industry, can potentially claim R&D tax credits. To do so, you must be engaged in activities that improve business processes and\/or develop products or services that are in areas of technical uncertainty. Many owner managers don’t realise they qualify, usually due to a lack of awareness, or being too taken up with the day-to-day running of their business to have time to focus on their eligibility.<\/span><\/p>\n<\/div>\n As a starting point, to understand if your projects potentially qualify, consider these questions about your R&D projects<\/a><\/span> and business to ascertain if you should pursue a claim, or not. Be sure to also take a look a this piece on GOV.UK regarding the meaning of research and development for tax purposes<\/a><\/span>.\u00a0 \u00a0<\/p>\n In general, but not a defacto rule, we find the following sectors are quite common to R&D claims.\u00a0<\/p>\n\n
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<\/a><\/span><\/span><\/p>\nWhat is R&D?<\/h2>\n
Who can claim R&D tax credits and relief?<\/h2>\n
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