Why are UK businesses still not benefiting from the full potential of R&D Tax Credits?

Across the U.K many businesses are still missing out on thousands of pounds they are entitled to by not submitting a Research and Development claim (R&D). SME businesses can claim up to 33p for every £1 spent on R&D qualifying activity and large business 10p for every £1 spent. R&D tax relief is one of the UK’s most generous tax reliefs yet due to the misconceptions surrounding qualifying activities many companies do not even consider claiming.

R&D often occurs within day to day business activities where companies are improving products and even internal processes to maintain a competitive and commercial advantage. For example, a manufacturing client who is making something faster, lighter, stronger or cheaper would be required to modify processes to facilitate this improvement. Any such developments will involve a reiterative trial and error process and a degree of uncertainty as to whether the desired outcome can be achieved. This development work is where R&D expenditure is commonly found.

We work with businesses across all sectors including bakers, software developers, architects and manufacturing companies of all types.

Examples of our recent claims include:

  • Law – Development of an automated claims processing solution to increase process speed and reduce manual intervention
  • Farmer – undertaking a program to identify the optimal predator insects for crops and climates to reduce the need for pesticides.
  • Energy supplier – development of a meter reading API for customer smartphones

A commonly overlooked opportunity is where a client incurs a significant spend to improve their internal efficiencies and reporting. In many cases off the shelf, products do not have the capabilities to provide end to end solutions. Companies often are required to develop solutions in areas such as stock management systems, time management software and tracking solutions.

In addition any off the shelf solutions require integration with existing systems and therefore project costs are incurred to bespoke the solution in order to generate the required communication or reporting functionality.
Given the significant challenges businesses face during these uncertain times, identifying and undertaking a successful R&D claim can provide a business with the much needed support. As claims can be made for two historic accounting periods including the current accounting period a business has to potential to receive a large benefit in a short period of time with the average claim value in the UK being £52,000 per accounting period.

Identifying the scope and value of R&D activity across business and undertaking a claim can be a complex process. Our job is to make the claim process as smooth as possible, which is why you will deal with the same technical consultant throughout the process.
If you feel you may have undertaken qualifying activity please get in touch.

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