Research and Development Tax Credits
Top Tips for Claim Success
- Put in place an effective finance system, for example, a simple spreadsheet, to capture qualifying expenditure on R&D projects.
- Ensure that employees who are involved in R&D projects understand that claims may be submitted based on the projects that they are working on and introduce workable processes, including a basic timesheet system to enable them to record the time that they spend on R&D projects.
- Ask relevant staff to document details of the R&D projects that they are working on to enable easier collation of details of qualifying projects at the year end. Sources of basic information that may help in this regard may include quality control records, lists of prototype trials, materials specifically used for R&D purposes and other general project lists. In addition, an issues log that details the problems and issues faced during prototype development would also be useful.
- Capital expenditure incurred on equipment to be used in R&D projects may qualify for tax relief in the year of acquisition so ensure that such expenditure is identified. This may include expenditure on machines, tooling, IT equipment and software licences, and property.
- Patent applications and accolades such as innovation awards also provide strong evidence that qualifying R&D has occurred within the business.
- Abortive R&D projects can qualify for relief so don’t forget to record details of these too.
- Finally, receiving any kind of subsidy or grant towards a R&D project can complicate matters so please speak to an R&D tax relief specialist before you take such subsidies.
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Common R&D Tax Credit claim issues
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R&D Tax Credit claim case studies
