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What are the steps in completing an R&D tax credit?

If you are a business owner or manager with a company presence in the UK, you may be eligible for research and development (R&D) tax credits. At GovGrant, our consultants focus on helping you to maximise your R&D tax credit claim no matter the size of your business or your principal products and services. We will help you to follow these simple steps to make sure that you are getting the most from your claim.

1. Identify your qualifying activities and their costs

There are many different activities that will qualify for R&D tax benefits as well as special considerations for your industry. Investing in the development of new projects that combat technological uncertainty, directly contributing to scientific research, and developing new software are examples of qualifying activities. You will need to sort out all of the associated expenses such as salaries and other payments, material costs, and any other eligible costs.

2. Correctly identify which R&D tax credit scheme applies to your company

There is a tax credit scheme for every size of business in the UK. But it will be different depending on whether you are an SME or a larger firm. SMEs are companies with less than 500 employees and either annual turnover under €100 million or a balance sheet under €86 million. If you are part of a larger organisation you may qualify for the Research and Development Expenditure credit (RDEC). You will need to examine your income, assets, and company structure to determine the correct R&D tax credit scheme and subsequent rates.

3. Include eligible R&D costs in the CT600 corporation tax return

Your research and development tax claims need to be consistent with the income and expenses reported on your CT600 tax return. The information from your corporate tax return needs to be readily available in order to compute the correct R&D tax credit rates. While the information will be used differently, the numbers still need to be consistent.

While not compulsory when filing your taxes, or making an R&D tax claim, GovGrant will provide a technical report to justify the costs submitted to HMRC. Having a full technical report of your R&D expenditure provides security in the event that your R&D tax claim is queried and the information will be easy to search. This is particularly important for larger companies that are investing in multiple projects that will be eligible for R&D tax credits in the UK.

GovGrant can help your small, medium, or large business make the most out of business grants, research and development tax credits and schemes, and other ways to get cash back for your innovative hard work.

Please talk to us today about how you can receive up to 33% back of your total qualified research expenditures.

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