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Darren Wingfield

Darren Wingfield

Commercial Manager

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4 things you probably didn't know about R&D tax credits

Posted on 12/02/20  |  4 Minutes
Business owner looking at their R&D tax claim

As R&D tax specialists, we talk to businesses every day about how they can make the most of this government incentive. And we would like to think that we know at least a thing or two about R&D tax credits. As the tax man looks to challenge some R&D tax claims we find that our expert knowledge comes in even more useful for our clients. Did you know that Harlands have a 100% success rate with R&D tax claims? But this isn’t the only thing you need to know about all of this. Here are 4 things you probably didn’t know about R&D tax credits and what they mean to you.

4 – You may have an eligible claim but just don’t know about it 

R&D light bulb illustration

Many of the people we speak to have a claim, but just don’t realise it. Here is a typical conversation we have with a client -

“R&D, what’s R&D?”

“It stands for Research and Development.”

“No, we don’t do any of that.”

“So, tell me about how your business has progressed over the last 2 to 3 years.”

“Well, we have brought out a new product, which took a lot of getting right. On top of that we set up new software to manage our systems. That was built from the ground up, just for us. This software allowed us to change the systems of work. We had to teach the team a whole new set of procedures that have made us 30% more productive.”

“All of these are likely R&D claims. New processes, procedures or products – even improvements to existing procedures, processes or products are often eligible for R&D tax claims. Let’s find out a little more.”

This is the first of the 4 things you probably didn’t know about R&D tax credits and in many ways, it is the most important. Speak to us and find out if you have an eligible claim. We only need around half an hour of your time and will let you know if you can claim back thousands from the tax man.

3 – It doesn’t take long to process a claim

The second on our list of the 4 things you probably didn’t know about R&D tax credits is that your claim could be with you sooner than you think. When you think back to the terms in the past you have had to deal with the HMRC, you break out into a cold sweat. Everything seems to take forever. Even waiting in the queue can feel like a lifetime.

But R&D tax credits seem to buck the trend on this front. We put together all the information they want and we have seen claims come back in as little as 6 to 8 weeks. This means that you can feel the financial benefit quickly. This is the most surprising on our list of the 4 things you probably didn’t know about R&D tax credits today.

2 – You can include more costs than you think 

R&D Dice

One of the things that comes up time and time again is the parts of your expenditure that are eligible for a claim. When looking at the 4 things you probably didn’t know about R&D tax credits the overall size of a claim is much bigger than many anticipate. Government incentives in the past often leave a lot to be desired. But with R&D tax claims they can run into the tens of thousands and beyond. In fact, our average claim size is a staggering £35k – imagine what that can do for your business.

We make sure you include all relevant costs, including –

  • Staffing costs
  • Associated staff costs such as pensions and employers NI contributions
  • Any money spent on contractors or specialists
  • Materials (including any wasted materials on discarded prototypes)

So, you can see that these different elements can come together and make a substantial claim for your business. This is the items on our list of the 4 things you probably didn’t know about R&D tax credits that will probably make you the most money.

1 – This isn’t just a one-off exercise

The last of our 4 things you probably didn’t know about R&D tax credits shows that you can make this an integral part of your business for years to come. Firstly, if you have never claimed R&D tax credits before, we can look back at the last 2 tax years as well as the current year. In addition to this, the government had backed R&D tax with finding at least until the 2020/21 tax year so you can put it in your business plan and maximise your claims.

Savvy business owners look at the money they will receive from R&D tax and make investment decisions on the back of it. This might be more research, taking on new team members or developing new products. Getting the most from R&D tax will help you to move forwards as a business.

We hope you got something from our 4 things you probably didn’t know about R&D tax credits and that it makes a difference to your business. Let us know if you have any questions about R&D tax.