A world-class innovation economy raises living standards, provides solutions to society\u2019s biggest challenges, and will drive a digital-first economic post-coronavirus recovery. There are obvious benefits for the UK government to incentivise innovation \u2013 which is exactly what it does with Research and Development (R&D) tax reliefs.<\/p>\n\n\n\n
R&D tax credits are a tax relief designed to encourage greater R&D spending, leading in turn to greater investment in innovation. They work by reducing a company’s tax bill by an amount equal to a percentage of the company\u2019s qualifying R&D expenditure or by the payment of a credit, again linked to the company\u2019s qualifying R&D expenditure.<\/p>\n\n\n\n
There are two schemes for claiming relief:<\/p>\n\n\n\n
You can claim SME R&D relief<\/a> if you\u2019re an SME with:<\/p>\n\n\n\n Large companies are able to claim via the RDEC. <\/p>\n\n\n\n SMEs are able to claim up to 33p for every \u00a31 spent on qualifying R&D activities. The average claim made by SMEs in the UK is \u00a357,228<\/a> (2018-19).<\/p>\n\n\n\n To qualify for R&D relief, your business needs to prove that it has entered into a project to make an advance in science or technology \u2013 that is effectively the government\u2019s definition of innovation.<\/p>\n\n\n\n The project must relate to your company\u2019s line of work. For instance, you need to prove that there are commercial benefits to the project.<\/p>\n\n\n\n In making your case for R&D tax relief, you will need to prove your project:<\/p>\n\n\n\n R&D relief can also even be claimed on unsuccessful projects.<\/p>\n\n\n\nIs your business entitled to make a claim?<\/strong><\/h2>\n\n\n\n