Your Ultimate Guide to HMRC R&D Tax Credits
Here in this guide, we will be taking a look at all you are to know on the innovation, research and development grants. Learn of the R&D tax credits.
The research and development, R&D, tax credits are corporation tax relief programs that will help a long way in helping reduce your business tax bill. If at all you are a small or medium size business, you will have the alternative of going for the tax credits which are often given in the form of cash sums paid by the HMRC. In order for you to qualify for the R&D tax credits, there are some basic qualifications that one should have met. First and foremost, your firm must be liable for corporation tax. Second is the fact that the R&D project must be one that qualifies for relief.
The next question would be what it is that actually qualifies, as an R&D project, for tax purposes. In order for your project to qualify for the tax credits under the schedule, your projects must satisfy the rather detailed HMRC qualification criteria. A project would generally qualify for the tax credits if they happen to provide an advance in science and technology. This project should be one that is actually related to what your business does or intends to do when established, for the startups. For the small and medium size business intending to claim these credits, they need to own intellectual property that may be arising from the project.
By far and large, all companies that meet such basic criteria can make a claim for the R&D tax credits from the HMRC, both the small and medium businesses and as well the larger corporations. The one must factor is that your firm should be liable to the payment of corporation tax.
While it may so sound so simple to know of what it is that qualifies for the tax credits, the fact is that there is much more to the rules that define the qualifying expenditure when looked at from a taxation perspective. Therefore you see the fact that it wouldn’t be so advisable for you to assume that all items of your R&D expenditure would be qualifying for R&D tax credits. It would as such be advisable for you to ensure that you liaise with an HMRC and R&D tax expert or read the R&D tax relief rules so as to get the guidance on how to make a successful application for these tax credits.
Generally speaking, R&D tax credits can be quite confusing and really complicated for the untrained and for this reason, it would pay for you to think of getting in touch with the pros.