Research and Development Tax Relief
Is your company engaged in research and development (R&D) activities? Are you looking to unlock valuable financial benefits and incentives? Our R&D tax relief services help your company maximise its tax savings and fuel innovation within your organisation. By leveraging the power of R&D tax relief, you can drive growth, increase your cash flow, and stay at the forefront of your industry.
What Is R&D Tax Relief?
R&D tax relief rewards companies for investing in innovation and technological advancements. It allows eligible companies to claim a reduction in its corporation tax profit or increase its loss, resulting in either a reduction in corporation tax liability, creation or increase of tax losses, or a payable cash credit based on qualifying R&D expenditure.
Is My Company Eligible for R&D Tax Relief?
To qualify, a company must be seeking a technological or scientific advance within its industry. It’s important to note that this does not have to be a successful project that becomes operational, nor does it have to be a completed project.
If your company has developed a new technological or scientific process, product, or service, or modified an existing one, it could be eligible for R&D tax relief.
For many years, both the SME and RDEC schemes for R&D tax relief remained very stable, except for periodic small changes in the RDEC rate. From Autumn 2022 onwards, a whole series of changes was announced and re-announced with incremental further changes. Some take effect for all companies incurring R&D expenditure on or after 1 April 2023, other changes are dependent on the month a company’s accounting period (AP) begins, and whether this is on or after 1 April 2023 or 1 April 2024 onwards.
If you would like to discuss your eligibility or enquire about how we can support your business, simply fill out the form below and one of our experts will be in contact shortly.
Changes Relating to Accounting Periods Beginning on or After 1 April 2023 (All R&D Schemes)
Companies Need to Notify HMRC in Advance
For APs starting on or after 1 April 2023, every company must notify HMRC that they are planning to claim R&D tax relief for the period, within six months from the end of the AP to which the claim relates (i.e., the claim notification deadline), unless exempt.
What Companies Must Give Advance Notification?
Any company that has not made a claim before will need to notify by the claim notification deadline. There are some exemptions that allow companies who have submitted eligible claims (based on the submission date of the R&D claim to HMRC), within three years of the claim notification period deadline, not to notify. However, this exemption does not include all claim submissions.
Any company that has made an R&D claim submission to HMRC in the three years before the claim notification deadline for the period being reviewed may consider the submission as part of the exemption if:
- The claim submission was made before 1 April 2023, or
- For claim submissions made after 1 April 2023, they must either:
- Be made as part of the original tax return submission or
- Be for a period starting on or after 1 April 2023
As the exemption is complicated, we recommend talking to an adviser as early as possible when considering undertaking an R&D project. If your company does not get timely advice on claiming R&D tax relief, it could miss the claim notification deadline and lose out.
HMRC’s Additional Information Form
From 8 August 2023, HMRC made it mandatory for all businesses claiming R&D tax relief to submit an additional information form, regardless of the AP being claimed for.
What Additional Information Is Needed?
Before the change, the provision of project information and cost analysis was recommended but optional. Now, HMRC requires firms to include the following before submitting their corporation tax returns:
- Project details – the scientific or technological advances, uncertainties, baseline, and activities undertaken.
- Project costs on a “per-project” basis, including details of qualifying indirect activities.
Changes Relating to Accounting Periods Beginning on or After 1 April 2024
Merged R&D Scheme: A New Single Scheme for SMEs and Large Companies
Legislation has been passed for the merged scheme RDEC – a single scheme, so companies of all sizes make claims in the same way, following the same rules. It is modelled on the “old” RDEC, with the same rate of benefit (but certain important differences) and will be in place for APs beginning on or after 1 April 2024.
Enhanced R&D-Intensive Support (ERIS) Scheme
Despite the vast majority of companies claiming under this scheme, loss-making R&D-intensive SME claimants will have a separate scheme, known as ERIS, which stands for “Enhanced R&D-Intensive Support.” For APs beginning on or after 1 April 2024, the R&D intensity threshold (see earlier) will fall to 30% (previously 40% from 1 April 2023), and a one-year period of grace applies where the SME does not meet the intensity threshold for the period but did in the previous period, allowing it to again claim under the ERIS scheme. The support given through the ERIS scheme will be the same as that provided in the old SME scheme to R&D-intensive companies allowing eligible losses to be surrendered 14.5% and subject to the same PAYE cap as the new merged scheme.
Ryan’s Comprehensive R&D Tax Relief Solutions
Eligibility Assessment
Our team of R&D tax relief specialists will conduct a comprehensive eligibility assessment to determine if your activities qualify for R&D tax relief. We’ll perform a detailed analysis of your R&D projects, expenditures, and documentation to ensure you meet the criteria set by HMRC. Our experts will ensure you’re capturing all eligible expenses to maximise your potential tax benefits.
R&D Tax Relief Calculation
Calculating your R&D tax relief accurately is key to optimising your financial benefits. Our team will handle the complex calculations, taking into account the applicable R&D tax relief scheme. We’ll ensure you claim the correct amount and provide you with detailed and robust documentation to support your claim.
Documentation Preparation
Preparing the necessary documentation for your R&D tax relief claim can be time-consuming and overwhelming. We’ll guide you through the process and assist in the preparation of all required documentation, including technical narratives, financial records, project descriptions, and supporting evidence. Our experts will ensure your claim is well-documented and compliant with HMRC guidelines.
HMRC Compliance and Support
Navigating the complexities of HMRC’s R&D tax relief scheme can be challenging. Our team will handle all interactions with HMRC on your behalf, ensuring compliance and addressing any enquiries. We’ll provide ongoing support, helping you maintain compliance and maximising your tax benefits in the long term.
The above is a summary of R&D tax relief and the changes in recent years. Please request a copy of our guide “HMRC’s R&D Tax Reforms: What Companies Need to Know” for a comprehensive overview of the R&D tax relief schemes.
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HMRC’s R&D Tax Reforms: What Companies Need to Know
Download a copy of our guide “HMRC’s R&D Tax Reforms: What Companies Need to Know” for a comprehensive overview of the R&D tax relief schemes.
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Other Innovation Funding Services
Ryan’s unrivalled expertise within innovation funding and tax relief empowers companies to fuel their business growth and fund their future. Our specialist team will evaluate your business’s eligibility for a diverse range of innovation funding services, including grants, research and development (R&D) tax relief, capital allowances, the Patent Box, and land remediation relief.