We help with R & D tax credits

For tax purposes, when a company undertakes a project that seeks to achieve an advancement in overall knowledge or capability in a field of science or technology, it is involved in R&D. The R&D scheme enables the company to either reduce its corporation tax liability, get a tax refund on previously paid tax, or, if the company is loss-making, they could receive a tax credit byproving that theyhave incurred costs on qualifying R&D.

From April 2024, there are primarily two types of R&D Tax Relief schemes based on your company’s size and the R&D activities.

• Enhanced R&D intensive support (ERIS)

  If you are an SME, i.e., a small or a medium-sized enterprise, with:

  • - less than 500 employees
  • - a turnover of a maximum of €100m or a balance sheet total of less than €86m
  • - you make a trading loss for tax purposes and
  • - you meet the R&D intensity condition,

  you can claim R&D tax credits under the ERIS.

  What does it offer?

  
  

  This relief allows a company to do the following:

  • Deduct 86% of their qualifying costs from their yearly profit over and above the normal 100% deduction, making a total of 186% deduction of their qualifying costs.
  • Claim a tax credit, worth a maximum of 14.5% of the surrenderable loss
• Research and Development Expenditure Credit (RDEC)

  If you are not eligible for the ERIS, you can claim under the RDEC scheme. Any trading company within a charge to corporation tax whether it’s an SMEs or a large company, is required to claim R&D tax credits under the RDEC scheme for accounting periods beginning on or after 1 April 2024.

  What it offers?

  
  

  The RDEC offers you a tax credit for 20% of your qualifying costs on the R&D project. The payable tax credits are subject to a notional corporation tax restriction depending upon the corporation tax rate (small profits or main rate) the company is usually subject to.

  Please note, for companies claiming R&D Tax relief with accounting periods beginning prior to 1 April 2024, the old R&D Tax relief schemes apply. Kindly contact us on info@dnsaccountants.co.uk to know more.

Whatever the size of your business, if you are creating new products, processes or services – or modifying existing ones – there is a good chance you could be carrying out R&D.

R&D can take place in any sector. It occurs in everything from food-processing to software development, construction to healthcare.

If you can answer 'Yes' to these questions then, it looks like you are involved in R&D:

• 1. Do you create new products, services or processes, using science or technology?
• 2. Or Have you improved your existing products, services or processes or experimented with new equipment or production techniques?
• 3. Have you had difficulties and challenges in trying to create or improve these products or processes?
• 4. Do you or your team have experience or qualifications relevant to this work?

Please use our R&D Tax relief eligibility checker to find out if you are eligible to make a claim –

The R&D tax relief claim needs to be submitted with your corporation tax return for the accounting period you would like to claim.

Prior to submitting the claim, you may need to submit a claim notification form and provide the necessary information to notify HMRC in advance of your claim. The notification can be submitted at any time between the beginning of the accounting period and up to 6 months after the end of the accounting period for which the claim is made.

Further, every company is now required to submit an additional information form to support their claims.

Please contact us to know more about the filing requirements and how dns can assist with your claims.