Can you claim R&D Tax Relief as an SME?
It’s a little-known fact that SMEs can claim R&D tax relief under certain circumstances. R&D tax relief helps companies who work on innovative projects in science and technology. R&D starts when work begins to resolve the scientific or technological uncertainty and ends when that uncertainty is resolved, or the work to resolve it stops.
SME R&D tax relief allows companies to deduct an extra 86% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total of 186% deduction. So for every £1 you spend, you gain an extra 86p in tax relief, therefore every £10k spent gives you an extra £8,600 in tax relief. You can also claim a payable tax credit if the company has claimed relief and made a loss, the payable credit is worth up to 10% of the loss.
To claim the relief, you need to be a SME and show how your project meets the standard definition of R&D, which you can find on the Government website here.
Claiming R&D Tax Relief as an SME
There are numerous areas that contribute to filing a claim for SME R&D tax relief. It is important to ensure that you use an expert to make the claim, let us be your guide through the process, with our specialist knowledge and experience with lodging R&D tax credit claims we will ensure the claim is correct and successful. As experts, we can confidently deliver assistance in areas such as:
- Eligibility/Assessment – our experts can assess eligibility and check if they qualify for the SME or RDEC scheme
- Savings calculation – we can provide a high-level savings estimate to see if it’s worthwhile
- Report writing – our in-house specialists write a technical report to support the claim
- Submission – our accountants finalise the claim and make a submission to HMRC
Which costs can I claim under SME R&D Tax Relief?
R&D tax relief claims are made up of a series of projects. Each project incurs a range of costs. Some of these costs are eligible for relief.
The most common costs companies can claim for are staff, contractors and consumables. Other eligible costs include:
- Software
- Clinical trial volunteers
- Contributions to independent research
- Prototypes
- Salaries
Full details of claimable costs are available on the Government website.
How can Sapphire help?
R&D claims are not simple and using the right expert in the field is crucial. We will guarantee any claim adheres to HMRC’s ever-changing regulations, how you ask?
We also employ true specialists, those who have previously worked for HMRC, who have many years of experience making claims for our clients in various industries, that way you can be confident that our specialists really know what they’re talking about.
It’s worthwhile arranging a chat with one of Sapphire’s R&D tax experts who can identify what activities qualify for your particular industry and assist with presenting this to HMRC.
If you would like to learn more, please get in touch by calling 01625 919162 or emailing sme@sapphireorg.co.uk.
