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  1. What Is The Purpose Of R & D Tax Credits?

    The R & D tax credit programme is one of the government's most important policies that support R & D investment on an ongoing basis throughout the United Kingdom. R & D tax relief that can either reduce a company's tax bill or for some small and medium sized companies provide a cash refund. The government has a strategy to raise R & D spending to 2.5 per cent of GDP by 2014. R & D tax credits are key to fulfilling this strategy.

    R & D tax credits were introduced in 2000 for small and medium-sized companies (SMEs) and were enhanced in 2002 to large companies. Recent government reports suggest that there are many companies who have not claimed the relief they are entitled to meaning that they have paid too much tax!
  2. Who Can Apply For These Credits?

    Companies and partnerships that are taxable under section 114 of the Income and Corporation Taxes Act 1988 are eligible to claims R & D tax relief.

    R & D expenditures must be deducted as a revenue expenditure or capitalized as an intangible under SSAP13 or IAS38.

    R & D expenditure must relate to the trade of the claimant or to a trade the claimant intends to undertake.
  3. What Is The Definition Of R & D?

    Essentially, an R & D project is one that meets the DTI guidelines set out by HMRC. Commonly, research and development occurs when: A company extends its overall knowledge or capability in a field of science or technology.

    A company creates a process, material, device, product or service which facilitates or represents an increase in overall knowledge or capability in a field of science or technology. A company makes an appreciable improvement to an existing process, material, device, product or service through scientific or technological changes.

    A company uses science or technology to duplicate the effect of an existing process, material, device, product or service in a new or appreciably improved way.

    Even if the advance in science or technology sought by a project is not achieved or not fully realised, R & D still takes place.
  4. What Type Of Expenditures Will Qualify?

    Staffing costs for those employees directly and actively involved in R & D. Utilities and overhead such as power, water, fuel and computer software used directly in the R & D. Consumable or transformable materials used directly in carrying out R & D. Sub contracted R & D – although the rules differ between small and large companies.
  5. What Are The Definitions Of A Small And Medium Sized Enterprises (SME) And Large Companies According To HMRC For R & D Tax Credit Purposes?

    The SME Scheme

    Prior to August 1, 2008

    SME's are enterprises together with any partner or linked enterprises which employ less than 250 staff and have either an annual turnover not exceeding €50 million or an annual balance sheet total not exceeding €43 million.

    Subsequent to August 1, 2008

    companies together with linked enterprises, with up to 500 employees, €100 million in turnover or an annual balance sheet total not exceeding €86 million will be classified as an SME.

    NOTE: The original scheme offers an enhanced deduction from profits for corporation tax purposes on qualifying expenditure on R & D. This deduction was 150 per cent prior to August 1, 2008. Effective August 1, 2008 it will be 175 per cent. SME's who incur a loss in an accounting period can claim a refundable credit up to 24% of eligible R & D spend.

    The Large Company SchemeThe large company scheme provides a deduction of 130 per cent of qualifying R & D expenditure incurred on or after April 1, 2008. For work undertaken prior to April 1, 2008 the rate of deduction is 125 per cent.

    No payable credit can be claimed by surrendering losses arising from expenditure that qualifies under the large scheme.

    Large companies can only claim for expenditure on R & D it carries out itself, unless it sub-contracts R & D in certain limited circumstances to certain entities. For more information on this, post a question and one of our associates will contact you within 24 hours.

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  6. We Are Unsure If Our Activities Qualify.

    Most companies believe that eligible R & D expenditures occur in dedicated research facilities or laboratories. However, this is not the case in under the R & D Tax Relief Scheme. RDP has found that there are very few scenarios in manufacturing, information technology, biotechnology and other industries where R & D does not take place. If in doubt, contact one of our associates for a no-cost, no-obligation assessment of your companies' eligibility. An associate will contact you within 24 hours.

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  7. What Is Our Filing Deadline?

    HMRC filing deadline for R & D tax relief is one year after the due date for filing your corporate tax return i.e. Generally two years from the end of the accouting period. By working with RDP, our initial submission of a technical report can cover the previous two years.
  8. How Much Time And Effort Will Be Required?

    For over twenty years, RDP has been perfecting its approach to assisting its clients maximize their R & D tax relief claims, commencing in Canada and moving onto the U.S and U.K.

    What distinguishes RDP from other service providers is our unique "peer to peer" approach. RDP technical staff, comprised of scientists, engineers and accountants, has the industry experience and academic qualifications to communicate effectively with your industry staff. The RDP approach adds value and credibility to your submission, whilst minimizing disruption to your technical and financial staff. Specifically RDP will:

    Identify R & D projects; Ensure all R & D tax relief claim criteria are met, Ensure claims are maximized by including all eligible R & D activities and costs; Assist companies address any questions HMRC may have concerning their review of the claim

    Our methodology has been developed with the intention of having a negligible impact on your staff or interference with your day-to-day activities).
  9. How Much Will It Cost Us?

    RDP offers 3 fully customizable payment options to cater to your business needs.

    RDP has flexible fee arrangements, including contigency fee, fixed fee, time and materials or any combinations thereof.
  10. What type of documentation do we need?

    You are required to maintain documentation to prove when and how you carried out the R&D project.

    Documents such as time sheets, project plans, log books, notes, physical prototype, test results, emails and minutes of meetings are examples of what the HMRC accepts. RDP has developed the innovation connection program to assist clients to capture, identify, and document R&D projects, activities and costs.