The rules and qualifying criteria for R&D, regardless of market sector or industry can be complex in terms of identifying what classes as relief and eligible expenditure when the data has not been captured at the time of expenditure. There are two different schemes for small and medium-sized enterprises (SMEs) and for large companies.
How do I know if I’m eligible?
In simple terms, if you can ‘Google’ it then it is not R&D. However, if the answer is not on ‘Google’ then has your company:
- Employed any staff with technical expertise or a scientific background?
- Designed and/or made any new products?
- Technically or scientifically improved any materials, processes, services or devices?
- Made any prototypes or performed testing on materials or products?
- Developed software or IT solutions?
- Failed in developing a product or process?
We have provided some links where you can find out more about the R&D regime:
Claiming Research and Development (R&D) tax reliefs
Making R&D easier for small companies
What to do now?
Significant changes were introduced on 1 April 2023, that will effect and R&D claims being made. These changes include the ‘additional information’ digital form which will be mandatory from 1 August 2023;
- New companies who have not made a claim in the last three years with accounting periods commencing on or after 1 April 2023, will have to notify HMRC, within six months of the end of the period to which the claim relates; and
- To file a claim, a named senior officer of the company must provide their endorsement and disclose any third-party agents who were involved in advising on the claim.
Cottons already include all of the above as part of our R&D claim process and if your company is wanting to ensure that they do not get caught out by the 6 months notice period or the additional digital form requirements from August, then we are here to help.
If you’re interested in gaining a better understanding of how the R&D regime is evolving and how it could impact your company’s R&D claim, or if you think your company is conducting eligible R&D activities and may have a valid relief claim, don’t hesitate to reach out to us.
