Newsletter Spring 2016

Making R&D easier

Lots of companies carry out Research and Development (R&D) in order to invent new materials and products, or just to improve their processes. The Government wants to encourage such innovation, so permits small companies to deduct 230% of their R&D qualifying costs. This reduces the cost of an R&D project by 46%. What's not to like?

The company must apply to use the R&D tax relief scheme within two years of the end of the year in which the R&D costs were incurred. Many companies don’t bother applying as they think it's too complicated, or fear it will lead to a tax investigation.

To help counter these myths, HMRC has set up an advance assurance process for companies that apply for R&D relief for the first time. If advance assurance is granted, the first three R&D claims the company submits will be accepted without enquiry.

To qualify for advance assurance your company must employ fewer than 50 people and have turnover of no more than £2 million. Larger companies can apply for R&D relief, but not through the advanced assurance process.

We can help you apply for R&D relief, whatever the size of your company.