Research and Development (R&D) tax relief is awarded to businesses that invest in innovation. This innovation can be in the form of developing new systems, processes, products, materials, devices, or any changes to the way your business works.
The chances are your business is doing R&D without even realising.
R&D occurs in a great variety of different industries, despite the misconception that this type of work is only carried out in laboratories or by scientists. We have worked with companies within the food industry looking for more energy efficient ways to create jam, as well as vaping companies looking for ways to improve the density of the vape clouds – we’ve seen it all!
Unfortunately, many companies in the UK are unaware of this type of tax relief or believe that they are not eligible to claim, so this is a reasonably underclaimed benefit.
Innovation in Scotland is increasing rapidly, with businesses spending more on research & development than ever before. Latest figures show year-on-year growth of 4.5% to £1.07bn and it has been reported that the number of new software companies being created in Scotland rose by 77% in the past year.
The government is looking to increase R&D expenditure as a % of GDP over the next decade from 1.7% in 2016 to 2.4% in 2027 so there is a lot of work to do! The latest figures have shown that there were only 1,425 claims made in Scotland last year, which means only 0.4% of SMEs are currently claiming – this could be worth millions!
Although many accountants claim to be able to complete your R&D tax claim for you, the complex nature of this area of tax often requires a specialist. We recommend Catax, an industry leading tax consultancy who specialist in this form of tax relief. They employ over 100 members of staff across the UK and can guarantee to maximise the claim that is made on your behalf.
Catax are considered leaders in the marketplace for R&D tax relief and there are a number of reasons for this.
Firstly, they submit over 200 claims per month with HMRC so their knowledge and expertise is vast, and their success rate is incredibly high. At the time of writing they only have one enquiry open with HMRC.
Catax are also the only company who can claim partnerships with some of the UK’s top accountants and solicitors, as well as the Law Society, ICAEW, and the IFA amongst other industry bodies. This adds a level of assurance to their clients that they are working with the best in the business, and their claim will be managed properly.
So far, they have helped clients claim back over £230m in tax relief, which is often invested back into the business to fund further research projects, hire new staff or to improve business premises. As mentioned above, this is a relief that HMRC encourage businesses to claim as the money often goes back into the UK economy, so there really isn’t any reason not to try it!
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What is Research & Development Tax Relief, and can my business make a claim?