Research And Development Tax Relief

Each case is different, therefore the tax relief and investigation into the costs for the tax relief will be different.. It is important you should provide the information easily and quickly. Our team can assist you in gathering and collate the information to ensure tax relief on research and development costs are claimed successfully.

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This tax relief gives companies that qualify for financial help based on a calculation of its corporate tax. It has been structured so both companies that are profitable and those making losses benefit. With regards to companies that are profitable the relief is provided by way of reduced tax liability.The reduction usually works out as being the equivalent of 25% of the research and development costs. With regards to companies that make a loss, a successful claim will increase the arising loss. This can be held against both profits previously made by the company and those that may be made in the future. 

Understanding Research And Development Tax Relief

If you are interested in claiming for R&D tax relief, it is important you understand that only certain costs can be included.  These costs in brief are:

  • Staff – Claims can include a percentage of relevant employees’ salaries, pension contributions and Class 1 NIC. This is to cover individuals directly involved in R&D work and also includes managers and supervisors who spend time directing their employees in these activities.  Whereas costs for support staff don’t qualify unless they are involved with indirect tasks that qualify.
  • External Workers – Claims can also include costs paid to staff from external agencies for the R&D project. This relief is restricted to just 65% of those payments. 
  • Subcontractors – R&D contractor rules depend on whether an organisation is a ‘large company’ or ‘SME’. Generally, the relief is restricted to 65% of costs for subcontractors.
  • Consumables – Expenditure on items consumed or directly used in R&D projects can be part of the claim. A proportion of power, fuel, water and materials used are included.
  • Software – Claims can include the cost of any software directly used for R&D. 


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