R&D TAX CREDITS

R&D Tax Credits

Research & Development Tax Credits are a government incentive aimed at helping UK businesses by encouraging and rewarding innovation. R&D tax credits can provide a timely boast to cashflow and aid business continuity.

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Tax relief on innovating new products or processes

Many companies are still surprised to learn they qualify for R&D tax relief, which can prove to be a valuable source of funding. If you have developed new or improved products or processes, you may be carrying out a qualifying activity.

If there are innovative projects within your business then you may well qualify for R&D Tax Credits, you must be undertaking research and development and have spent money on it. Recent claims by ADM Accountancy include claims for marketing companies who have developed new marketing systems for their clients and for software development companies.

Reduce your tax bill by developing your business

Projects that your company carries out should seek to achieve an advance in technology. The advance refers to overall knowledge or capability in a field of technology.

How much a claim is worth depends on how much money you have spent on qualifying R&D activity. Eligible costs can include appropriate expenditure from the following:

staff costs, including employers NIC and pensions
subcontractors (restricted to 65%)
software and consumable items.

For small and medium-sized businesses, if you have spent money on qualifying expenditure, your company’s corporation tax bill will be reduced by an extra 130% of the amount you spend on R&D innovation.

As an example, the company gets 100% relief for the qualifying expenditure through its accounts, so the enhancement is another 130% on top. Therefore, a company with eligible expenditure of £10,000 will see a total reduction in its tax liability of £4,370 (£10,000 x 230% x 19%).

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Talk to us about reducing your tax liability

Companies have two years from the end of an accounting period to submit R&D tax claims for qualifying expenditure incurred in that period.

Remember, R&D Tax Credits are not just for scientists in white coats. If you have developed new products or services or even improved your current offerings, the R&D Tax Credits may well benefit your business. Talk to us about how we have saved professional service clients tax over the recent years.

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I first hired Andrew as a new sole trader in 2012. His expertise and knowledge was evident from the outset, and this reassured me as a newly self employed person. Andrew is personable and open, and took time to understand my business and accountancy needs. I trust Andrew’s advice and information, and he continues to offer support in helping me to develop my business. My husband has recently become a sole trader and is also using Andrew’s accountancy services. I would highly recommend Andrew to anyone needing financial management or accountancy services.

Marie Brobyn
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Thank you Andrew for your support & professionalism during my recent planning application at my equestrian business, as you know it all hinged on the financial viability of the business. Both consultants that dealt with the application for me commented that they had never worked with any accountant that had been so amenable & willing to help whilst also realising the importance that speed of response was of the essence.

Sharon Thomas, Burley Lodge Stables
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I switched my business and personal accounting services to Andrew at ADM Accountancy this year after a recommendation from a friend. The service has been excellent in every respect and I have no hesitation in recommending Andrew at ADM for anybody self-employed or owning / running a SME business.

Phil Lynn, PML Projects Ltd
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Andrew has been involved with Williams Windows from the outset and his advice and guidance has been fantastic and we would not hesitate to recommend him to any other business, new or old. Andrew responds immediately to any requests we make of him and suggests ways to make our business more tax efficient. We look forward to a long business relationship with ADM Accountancy Services.

Ian & Roz Williams, Williams Windows
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Andrew is extremely knowledgeable and trustworthy. He’s helped and advised me on numerous occasions. He provides a considered accountancy service that meets all my financial needs and helps develop my business going forward. I wholeheartedly recommend him to anyone looking for accountancy services.

Kelly Owen, Ultimate Proof Ltd
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Andrew is always accessible when I require advice or information. He is like a safety net for my inexperience in accountancy! He is polite, helpful and efficient and I can always rely on him. He gives me confidence when I am in doubt. I wouldn’t be a successful business without him.

Carol Hunt, Glos Little Ducklings