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Research and Development (R&D) tax relief

R&D is the process companies undertake to innovate and introduce new products or systems

There are tax breaks to encourage R&D activity because it is so important. R&D allows a company to stay on top of the competition, it is crucial – without R&D a company may not survive.

What does our R&D service include

R&D tax credits can reduce the tax bill for profitable companies, increase losses (saving tax in the future) for others and for some loss-making companies provide finance to assist in meeting costs. We can guide you through the requirements and assist you in making a claim.

We will review your business, its structure and activities and with you ascertain how much of your activity relates to qualifying R&D.  We will then liaise with you to work out which R&D tax relief is available to you, either: –

  • Tax relief at a total of 230% of eligible cost with the ability to surrender losses for cash at a rate of 14,5%; or
  • Tax relief at 100% plus a taxable credit at 13%.

Whilst the uptake on R&D claims has increased over time it does seem that there are still a lot of companies missing out on valuable reliefs. We never want our clients to over-pay tax.

We will spend time with you to understand your business so we can help you identify the reliefs available and make the relevant claims. We believe you and your team are best placed to identify the innovative nature of what your business does – you know it better than anyone.  We will give you the guidance you need to be able to identify R&D costs and will then work with you to formulate both the actual claim and the necessary explanations for HMRC to support this.

What are research and development tax credits?

Research & Development (R&D) tax credits are a tax relief allowing companies to reduce their corporation tax liabilities (and in some cases enabling tax refunds) who are engaged in qualifying R&D activity. Qualifying expenditure must be incurred however in creating new products or processes or improving existing ones. They are available for both small and medium sized companies (SMEs) and large corporations to encourage innovation and growth in business for the UK in that the more companies invest in R&D, the more they will have to spend on innovation.

How do you qualify for research and development?

To qualify for R&D tax credits, you must prove that your company has undertaken work as part of a specific project that seeks to make an advance in science or technology that relates back to your company’s trade. The project can focus on a product, new process or service either improving it or inventing it from scratch, however, you must be able to demonstrate that the work done could not be easily worked out by a professional in the field and that you have had to overcome or tried to overcome uncertainty. In other words, you must prove that you are striving to make an advance in science or technology to improve industry in the UK. At Mercer & Hole, we can meet to discuss the nature of your company’s work to ascertain whether you are eligible to claim R&D tax credits.

Case Study: Jellyfish Pictures

We worked with Jellyfish Pictures to provide a cost effective approach to R&D tax credits, saving them both time and money. Providing 100% fee transparency, 0% commission basis and templates that HMRC recognise.

Read Case Study >
Case Study: Jellyfish Pictures

Do you qualify?

Research & Development (R&D) tax credits are a tax relief allowing companies to reduce their corporation tax liabilities (and in some cases enabling tax refunds) who are engaged in qualifying R&D activity. Qualifying expenditure must be incurred however in creating new products or processes or improving existing ones.

Click here to go to our flowchart which will help you gain an understanding if you qualify for R&D tax credits.

Research & Development Tax Specialists

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Why work with us?

We inspire confidence. We are recognised as a top 20 firm for tax in the UK and, with a significant proportion of our partners specialising in tax, you will benefit from exceptionally high levels of technical expertise and experience. We will advise you accordingly, enabling you to plan with realistic ambition.

  • Accessibility
    Accessibility

    4 Offices, London, St Albans, Rickmansworth and Milton Keynes

  • Cross Team Expertise
    Cross Team Expertise

    Joined-up advice across all services, including, Corporate Restructuring, Corporate Finance and Corporate and Business Tax

  • Sector Knowledge
    Sector Knowledge

    Advise a wide range of industries and sectors Sector-specific experience and insight

  • Specialist Knowledge
    Specialist Knowledge

    Knowledge on variety on services, such as, Remuneration, Research & development, Capital Expenditure and Patent Box Relief, EIS and SEIS and buying and selling a company

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