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FAQs

Got questions? We’ve got answers… here, you’ll find frequently asked questions (FAQs) and concerns in the tax industry. We try our best to answer every possible question that you might have. However, if you have any further questions that aren’t answered in this section, please explore our Knowledge Library or contact our team of R&D tax consultants.

R&D tax relief is a financial incentive by the UK Government. You can receive the R&D tax credits as either an offset to your corporation tax liability or as a financial sum sent to you. This tax relief is available to companies who are involved in R&D-eligible activity. Essentially, if you invest in innovation, then you could receive some R&D tax relief. This is applicable to you if you are involved in creating or developing products, processes, computer software, techniques, formulas, or inventions that lead to enhanced or novel functionality, performance, reliability, or quality. You don’t have to be at the forefront of designing something brand new but you need to prove that you are making an improvement to something already existing. The government actively wants to see more R&D activity so they invite you to spend more on your project with their tax relief. You can learn more about R&D tax credits in our guide.

Yes! However, if you have already received a State Aid grant for your project, it’s possible that it could impact your claim. Therefore, it’s advisable to check with your grant provider.

The Government created the research & development legislation as an incentive to encourage businesses that are developing new or appreciably improving existing; products, processes, systems, and materials – anything that contributes to the growth of the economy. Whenever an application for an R&D claim is submitted, it is sent to the regional departments of HMRC, where it is scrutinized along with the submitted reports. The application is then evaluated to determine whether to approve, query, or reject the claim.

At Alexander Clifford, we understand that you want to invest in a service that will deliver results without breaking the bank. That’s why we’re proud to offer a ‘No Win, No Fee’ basis for all our services. 

After successfully identifying an R&D claim, we only charge 25% of your service entitlement, which is lower than the industry average. If we don’t identify an R&D claim, we won’t charge you anything at all. With our ‘No Win, No Fee’ approach, you can rest assured that your application is completely risk-free. Book a free consultation now.

In short, an accountant specialises in managing your accounts, whereas an R&D tax claim specialist is highly knowledgeable and skilled in identifying eligible R&D activities for tax credit purposes and can increase your chances of receiving benefits from your R&D claims.

To elaborate further, assuming you have a qualified accountant, who handles everyday purchases and typically has a wide-ranging workload that includes managing your accounts and addressing general business matters. 

By contrast, R&D tax claim specialists focus exclusively on R&D applications, which means they stay up-to-date with new legislation, industry standards, and technological advancements. They pride themselves on their ability to develop technical narratives and financial reports that accurately reflect the rules and regulations established by HMRC’s Consumer Tax Act 2009. As a result, they can support you through the R&D claim application process more efficiently than an accountant. Moreover, their knowledge of technical and scientific advancements is more comprehensive than that of an accountant.

That will completely depend on the situation and context of your company. Please explore our knowledge library related to SMEs and large companies for more details.

The amount you can claim for your R&D activities depends on the size of your company.

  • If you are classed as an SME, you can expect to qualify for relief of up to 33% of the total expenditure of your R&D activities under SME scheme.
  • To be considered as an SME your company must have no more than 500 staff, a turnover of under €100 million, or a balance sheet of under €86 million.
  • Larger companies can effectively claim relief of up to approximately 10% of expenditure on R&D activities under RDEC scheme. However, the benefit they receive from the expenditure is also taxable. Businesses with a turnover of more than €100 million, or a balance sheet of over €86 million, and have more than 500 employees are considered large companies

A technical narrative is a summary of your project’s scope and development, typically spanning two to five pages. It highlights any uncertainties or challenges encountered during the work. It is optional but provides an opportunity for you to explain your work to HMRC, adding value to your R&D claim.

You can submit one claim per tax year.

Yes, as long as you meet the eligibility criteria for R&D tax credits, start-up companies can claim.

Dividend payments can’t be included in your R&D claim because they don’t reflect the true nature of R&D.

What are R&D qualifying costs?

Staff PAYE costs/Pension contributions

Your company is eligible to request reimbursement for salaries, wages, class 1 NIC (National Insurance Contributions), and pension fund contributions paid to employees who are directly and actively involved in the R&D projects.

Subcontracted Costs

These costs pertain to payments made to an external agency for individuals directly and actively involved in the R&D project. These individuals are not employees or subcontractors but are engaged through the agency. Typically, relief is provided for 65% of the payments to the staff provider.

Materials and consumables

Your company is eligible to seek reimbursement for the expenses incurred on items that are directly used and consumed in qualifying R&D projects. These expenses cover materials, water, fuel, and power utilised in the R&D process.

Two persons having a discussion about waste to energy plant technology.

Software purchases

The expenses related to operating systems, software platforms, and permissions granted for accessing and utilising digital data that is directly used in your R&D activities can be reimbursed. You may need to allocate the costs of partially used software appropriately to determine the eligible amount for the claim.

Travel costs

Certain travel expenses associated with your research and development may also be eligible for your claim. These costs include collaboration, attending relevant events, visiting research sites, or conducting fieldwork directly tied to your R&D projects.

Utilities

Utilities such as water, gas, and oil can also be claimed as part of eligible costs. However, it is important to note that only the portion of utilities used exclusively for R&D purposes will be eligible, not the entire utility bills.

The claim process

We understand the complications that can often arise when completing an R&D claim, not to mention the significant amount of time it can consume, diverting your attention from driving your innovation forward. That's why we have streamlined a transparent and hassle-free process that follows a step-by-step approach from start to finish.

Throughout your R&D claim process, we maintain open lines of communication tailored to your preferences. Once we have compiled comprehensive technical and financial reports, we take the responsibility of submitting them and proactively follow up with HMRC, leading the communication on your behalf. Often, our next contact with you brings the exhilarating news of success and positive outcomes.

Step 1

We'll gain your authorisation via our client instruction form/NDA. This will enable us to discuss your R&D activities along with your current tax position.

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Step 2

We'll analyse the profit & loss (P&L) statement of the business while facilitating your technical call. This step aims to determine whether your case is feasible from both technical and financial perspectives.

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Step 3

Once our experts are confident that your case meets the R&D eligibility criteria, we will then gather all the required technical information and financial documentation according to HMRC's standards to support your case.

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Step 4

At this stage, we initiate a stringent compliance procedure that we have developed in-house to audit your R&D claim application. We verify whether it meets the defined standards before submitting it to HMRC to ensure a positive outcome.

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Step 5

After conducting a comprehensive review of your R&D claim, including all required documentation, the application will be forwarded to HMRC for further processing.

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Step 6

Our team maintains continuous contact with HMRC regarding your case. If any queries arise, we address them on your behalf using a highly systematic approach to maximise your outcome while minimising any delays in your repayment.

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Get Started

Our hassle-free and streamlined process is waiting for you to get started and to make you feel confident throughout your R&D claim application.
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