By Martin Sharkey on Small Business – Advice and Ideas for UK Small Businesses and SMEs
What is an R&D credit?
Research and development (R&D) tax credits are a government incentive designed to reward UK companies for investing in innovation. They are a valuable source of cash for business to invest in accelerating their R&D, hiring new talent, and ultimately transform your business. The government benefits from increased productivity which impacts the economy and can effect positive change on a global scale. The businesses over the last 20 years have claimed approximately £33bn.
Businesses that spend money developing new products, processes, or services, or enhancing existing processes are eligible for R&D tax relief. If you are spending money on innovation, you can make an R&D tax credit claim to receive either a cash payment or corporation tax reduction. The scope of qualifying R&D is huge – in fact, it exists in every single sector. If you are making a claim for the first time, you can claim R&D tax relief for your previous two completed accounting periods.
What qualifies for R&D tax credits?
From agriculture to construction to fintech, all sectors that have the scope for research and development are eligible to claim tax credits.