What are the benefits of receiving R&D tax credits?

A successful R&D claim has the potential to elevate your business by providing a financial boost and a competitive advantage. Here is what else you could achieve with an R&D tax credit payout:

• Tax credits or deductions:

Depending on your company’s circumstances and the R&D scheme that applies, a successful claim may reduce the amount of Corporation Tax due or result in a payable amount where the relevant conditions are met.

• Offset costs:

R&D can involve considerable expenditure on areas such as staffing, software and materials. Tax relief can help reduce the overall financial impact of carrying out qualifying R&D activity.

• Reduce your company’s tax bill:

Where applicable, R&D tax relief may reduce your Corporation Tax liability. The amount of relief available will depend on your qualifying expenditure and tax position.

• Attract investment opportunities:

Undertaking R&D can demonstrate continued investment in developing products, processes or technology. While an R&D claim doesn’t guarantee external investment, the activity and resulting financial position may support wider funding discussions.

• Further invest in innovation:

Funds retained or received through R&D tax relief can give businesses more scope to continue investing in research and development. This could include recruiting technical staff, purchasing equipment or funding the next stage of a development project.