R&D Tax Credits
ThirdRock will do the heavy lifting…
What are R&D Tax Credits?
Research and Development (R&D) tax relief, otherwise known as R&D Tax Credits are a government incentive designed to encourage innovation, risk taking and increase spending on R&D activities for companies operating in the UK. One of the most generous areas of the UK tax code encouraging companies to innovate and invest in research and development allowing companies to receive back up to 33% (up to 21.5% from 01/04/2023) of qualifying costs. NB. New scheme rules applying for AP’s commencing 01/04/2024.
Many businesses don’t realise that they qualify for R&D Tax Credits or that they are not claiming their full entitlement. The R&D tax incentive was launched in the year 2000 and approximately £7.5bn per annum is currently being claimed (latest gov.uk statistics). On average SME’s are claiming c£85,000 (2022/23).
Who can use it?
Any company in any industry may be eligible for R&D Tax Credits. The key is that the company must be undertaking project research and development activities that seek to achieve an advance in a field of science or technology. The project must contain a level of technological uncertainty that is not readily deducible by a competent professional so, if you have faced questions that has left you and your team scratching heads to find a solution, then that’s a good indication that R&D activities are taking place. If your company is taking a risk by innovating, improving or developing a process, product, or service, then it may qualify for R&D Tax Credits.
A good test to determine if the work undertaken qualifies for R&D tax relief is whether your project team faced technological uncertainties at the start of the project. That means that your team did not know from the outset whether a particular technological goal was achievable. If you can show that your company’s project goes beyond applying existing technologies and can demonstrate that it breaks new ground, you can claim R&D tax relief.
What projects or activities can be included in a R&D Tax Credits claim?
A project which seeks to, for example;
Extend overall knowledge or capability in a field of science or technology; or
Create a process, material, device, product or service which incorporates or represents an increase in the overall knowledge or capability in a field of science or technology; or
Make an appreciable improvement to an existing process, material, device, product or service through scientific or technological changes; or
Use science or technology to duplicate the effect of an existing process, material, device, product or service in a new or appreciably improves way (e.g. a product which has exactly the same performance characteristics as existing models, but is built in a fundamentally different manner), will be R&D for tax purposes.
A simple way to start seeing rewards sooner
Up to 33%
Receive back up to 33% of qualifying costs
*rate changes apply from 01/04/2023 and new scheme applying for AP’s starting 01/04/2024
65,690
65,690 estimated claims*
*latest HMRC figures year to Mar 2023
7.5 Billion
£7.5 billion in R&D Tax Relief support.* *HMRC figures year to Mar 2023
28 Days
HMRC aims to pay out claims within 28 days
Frequently Asked Questions
How do I find out if I’m eligible to claim for R&D?
When you book a telephone consultation or initial appointment our R&D expert will chat through your business and its potential qualifying activities. Don’t worry if you are unsure what qualifies, we’ll ask the right questions to find out.
Why should I get ThirdRock to do my R&D claim?
R&D Tax Credits are a very generous but equally technical area of tax. We know them inside out as its all we do. We will endeavour to explain the qualifying criteria to you and handle all the paperwork for you, get the money you’re eligible for quickly and use our expertise to get the best possible result. You only pay us following submission of your claim and dependent on the company’s tax position, after receipt of your first tax benefit or tax reallocation and you will enjoy our exceptional service.
NB With all tax claims submitted to HMRC these are the responsibility of your company. By approving any claim prepared by ThirdRock you are in acceptance of all tax regulations and obligations.
Yes. It is a cornerstone of UK tax policy to reward companies who innovate and take risks by investing in Research and Development by providing incentives through the tax system.
Are R&D Tax Credits provided by the government?
Do I have to be a Limited Company to claim R&D tax credits?
Yes. R&D Tax Credits are only available to limited companies. Sole traders, partnerships, limited liability partnerships, charities and associations can’t apply.
Can I back date my company’s claim?
Act fast. Your company may currently make a claim for any qualifying costs made in the last two accounting years. There are strict time limits for making claims and for accounting periods starting April 2023 will need to pre-notify so please speak to us as soon as possible.
How much do ThirdRock charge?
Our standard fee is 15% plus vat of the total tax benefit realised by the claim, subject to our minimum fee of £1,500 plus vat. Our fee is payable immediately that the first tax benefit is received or if earlier, the date the tax benefit is crystallised or reallocated against other HMRC taxes.
How long will it take to receive the money?
As soon as we have all the required information we will submit your company’s claim. Once HMRC receives our submission, they typically take 28days plus 10 days processing time to pay out.
Will HMRC investigate my R&D tax claim?
Along with any tax submission HMRC have powers to check if the claim submission is correct. ThirdRock is available to stand firmly behind all R&D claims and by separate negotiation will deal with any HMRC enquiry on your behalf.
ThirdRock HMRC enquiry services are available to non client claim submissions and accountants, by negotiation.
