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Markel Tax

15 Mar 2018

The deadline for claiming R&D tax relief is fast approaching...don't miss out!

What is R&D tax relief?

Research and Development (R&D) tax relief was introduced in 2000 and is a key part of the government’s strategy to support innovation in the UK by improving productivity, performance and competitiveness. It works by reducing a company’s corporation tax liability or by making a payment to the company. 

How much could R&D tax relief be worth to my clients?

Subject to your client satisfying the qualification criteria the cash value of claims for tax paying companies is approximately £26 for every £100 spent from April 2015 and £33.35 for companies with losses.

According to HMRC statistics, the average R&D claim is worth £110,455 to UK SMEs.

Why do you need to act now?

Following the end of your clients accounting period, you have two years to submit a R&D tax credit claim for qualifying expenditure incurred in that period.

If you do not act now, you are at risk of missing the 31 March 2018 deadline.

Once the deadline at midnight on 31 March 2018 passes your clients can no longer claim R&D tax relief on any money spent on qualifying activities between 1 April 2015 and 31 March 2016.

If you have already submitted a claim for your client and want to make sure you haven’t missed out on any qualifying expenditure the same deadline applies.

Don’t let grant funding stop you

There is a misconception that the receipt of grant funding prevents clients from claiming R&D tax relief. This is not true. 

The threshold for obtaining grant funding can invariably be higher compared to the threshold for R&D tax relief and we always advise clients to explore R&D tax relief opportunities if they are in receipt of grant funding.

How can we help?

R&D tax relief is a specialist area of UK taxation which requires expertise in order to ensure that all qualifying activities and allowable costs have been identified and are being claimed.

Our expert team, staffed by Chartered Accountants, Chartered Tax Advisers and technical staff educated to PhD level in a variety of sciences are on hand to help.

It’s never too late…

We were introduced to a client on Thursday 30 March 2017 and quickly established that there was a claim to be made. In collaboration with the accountant, we were able to tease out the areas that were qualifying and draft a robust technological argument which was submitted to HMRC. 

The claim was worth £197,202 to the client and we made the deadline by six hours!

It’s definitely never too late…

On Thursday 30 November 2017 we held a R&D tax relief clinic alongside one of our referral partners in Stoke-on-Trent.

At 11am, we were introduced to a business that manufactured high-spec lenses for telescopes and quickly established that their activities qualified for R&D tax relief. The company’s year-end was 30 November (that day!) and we identified £110,908 of allowable expenditure in the period ending 30 November 2015.

The R&D tax relief claim was submitted to HMRC at 5.30pm that afternoon and the client received a cash benefit of £22,772. If we had held the clinic the following day, the client would have lost that cash benefit.

For a free eligibility assessment or review of an existing claim, please contact a member of the team today by calling 0114 2364457 or emailing taxmarketinguk@markel.com.
Tagged R&D tax reliefs
Next article in series

13 Mar 2018

Corporate tax and the digital economy: position paper

The speed and scale of the changes caused by digitalisation have had implications for the UK tax system especially in respect of corporation tax, where the development of certain business models has challenged the understanding of how and where companies create value and ultimately how that value is taxed.

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