Here at Easy R&D, we’ve heard all kinds of untruths about research and development (R&D) tax credits. Namely, the misconception that the scheme is solely for science and tech businesses — hence why so many eligible companies across so many industries are missing out.
Since its launch in 2000, HMRC has paid out £33 billion in R&D tax credits to tens of thousands of UK businesses. Yet according to HMRC data, £84 billion goes unclaimed each year. Could you be eligible for your share?
Here are five reasons why you might not be claiming R&D tax credits but should be
1. My company is too small, and our R&D spend is low — it’s not worth the bother
R&D tax credits can provide you with a valuable cash injection — no matter how small your business is. The government designed the scheme for small to medium enterprises, i.e. a company with:
- fewer than 500 staff
- a turnover of less than €100 million or gross assets of less than €86 million
Providing that your business is a limited company subject to corporation tax, you can claim — even if you’re the only person working there. The key to successful R&D tax credits isn’t about the size of your company or its turnover; it’s the amount you spend on innovation that’s key.
2. My company doesn’t have an R&D department
It doesn’t need one. We find R&D in the most unlikely of places. It often surprises our clients when we uncover R&D embedded into the daily goings-on in their business. This is work they consider merely day-to-day operations or “getting the job done”.
It might be that your company’s main activity and departments differ. For example, an agricultural company might not be considered waste management but is dedicated to developing processes to reduce waste, such as biofuels.
3. No one in my company wears a white lab coat
HMRC’s definition of R&D is purposefully broad and much wider than you might think. While HMRC stipulates that an “advance in science or technology” must take place, you don’t need to be handling test tubes or space rockets to qualify.
You could be solving problems, creating machinery, software, services, products or processes — or modifying existing ones. It could be that you’ve run into dead ends and had to change direction. Glitches and teething problems both show uncertainty. Provided you’ve tried to or successfully overcome uncertainty, there’s a strong basis for a claim.
4. The less my company has to deal with HMRC, the better
You may be nervous about the thought of HMRC probing your business. But rest assured, the R&D tax credits scheme is a fully-approved, government-backed incentive. It’s in no way a tax dodge. If you’re innovating, HMRC actually wants to give you money. There’s no catch in small print, either.
Our robust processes attract minimum HMRC investigation and a maximum return in R&D tax credits. Should HMRC have any questions about your claim, we’ll liaise with them directly and only involve you if absolutely necessary.
5. Claiming R&D tax credits sounds like a lot of hassle
We do all the work that goes into claiming R&D tax credits so that you don’t have to, leaving you free to get back to doing what you do best: winning business for your next R&D tax credits claim. We’ll only need 4–5 hours of your time, which is a small sacrifice for a valuable reward.
Contact us today, and let’s see if your business is eligible.