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research & development

research & development relief

Innovation is the life blood of industry and so HMRC offers you generous tax relief for investing in research & development.

These reliefs can substantially reduce your corporation tax liability, and better still eliminate it altogether. If you have tax losses, then of course you will have no corporation tax to pay. Instead, you can claim a refund against your PAYE and NIC to generate a welcome cash injection into your business.

Many companies fail to claim what’s due to them because they don’t realise they are eligible.

is it just for technical boffins?

Most companies perceive this relief to be just for high tech sectors, but this certainly is not the case. We’ve made successful claims for clients of all shapes and sizes, and in a wide range of sectors too.

Here are some of the questions we’re asked:

  • can we claim if we’ve received a grant?
  • can we claim if we’re making taxable losses?
  • can we claim if we’re a subsidiary?
  • can we claim if the project isn’t successful?
  • can we claim without a patent in place?

The answer to all of these questions is yes you can!

who can claim R&D tax relief?

To be eligible, first of all you need to be a company which is liable to corporation tax. So, if you are trading as a sole trader, partnership or LLP and intend to spend a significant amount on research and development, then it would be a good idea to talk to us about incorporating.

The amount of relief depends on the size of your company, and the rates change in the Budget periodically. Just get in touch with us for the exact rates, and we’ll also do a tax

savings illustration for you.

what qualifies for R&D tax relief?

You need to be working on a project which ‘advances existing science or technology’, and the work you are doing isn’t easily deducible by others working in your field.

But don’t let this put you off – we’ve made successful claims for small to medium sized companies in:

  • engineering
  • vehicle repairs
  • IT and software
  • logistics
  • road markings
  • vending machine manufacturers
  • electrical insulation
  • clothing, and more.

how can Mitten Clarke help you?

Once we’ve established that your project qualifies, we will pull together a claim made up of costs such as:

  • employment and subcontractor costs
  • materials
  • testing and trialling costs
  • energy and utility bills
  • software and licences
  • capital allowances on capital expenditure.

We’ll then review your tax affairs and decide how best to use the relief. You could choose to claim a tax repayment, you might create a tax loss and carry it forwards or backwards, or offset the loss against PAYE and NIC paid to claim a refund.

We submit the claim to HMRC and deal with all of the correspondence for you.

If you need help or expert advice on research and development tax relief, speak to our team today via our contact form or email us on!