Don’t miss out on tax relief for your R&D projects

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Did you know that you can claim tax relief or tax credits on your Research & Development (R&D) work? In fact, a few manufacturers we are working with, didn’t even know some of their collaborative projects were classed as R&D.

What is R&D tax relief?

It’s a financial benefit that contributes to the economic boost that collaborative R&D can bring to a business. The estimated total amount of R&D tax relief support claimed for the year ending March 2020 is £7.4 billion, an increase of 19% from the previous year (source).

Who is R&D tax relief for?

Organisations that spend money developing new products, processes, or services – or even evolving existing ones, are eligible for R&D tax relief. In a nutshell, if you are investing in your innovation, you can make an R&D tax credit claim to receive either a cash payment and/or Corporation Tax reduction.

What you need to know

The main challenge to claiming R&D tax relief or credits is understanding the HMRC guidelines and how these can be applied to manufacturing (or any other sector) and also depend on what area the R&D slots into e.g. technology or science. Organisations tend to apply their own definitions of R&D, and these can often differ from the HMRC guidelines. The guidelines can help organisatons establish what R&D work can be claimed and how to gather the qualifying costs but there is often confusion about specific details – hence why many organisations miss out on the full benefits they are entitled to.

Support for MADE Cymru students

MADE Cymru has incorporated sessions on R&D tax relief to our finance module for the Upskilling for Industry 4.0 course to ensure that the organisations we work with are fully aware of this legislation. Dr Simon Ball who works for RandD Tax, has been invited to Friday’s class to talk about this.

Simon Ball says, “We’ve helped 1,300 businesses claim over £150 million in benefits since 2012, R&D Tax Credits or R&D Tax Relief enable companies to either reclaim tax paid, reduce tax paid, or in the case of loss-making companies to surrender losses for tax credits. On a simple level they bring a cash injection for R&D work already done. Not claiming them means hidden value in your business might not be recognised. A claim can be made anywhere there is innovation – it is worth checking if you could make a claim. Please get in touch for a FREE assessment for further details.”

Lisa Lucas, MADE Cymru said, “By taking part in our Advanced Design Engineering R&D programme, you can benefit from the support and expertise of our team, who use their knowledge and experience to offer a wide range of approaches and technologies that could help you bring your prototype or concept to life. We’ll work with you to explore how advanced technologies, new materials, tools and techniques could optimise your products and increase efficiencies in your manufacturing processes. ADE’s focus on collaborative R&D is also a potential tax benefit and an additional step in future-proofing the organisation.”

Please contact us on 01792 481199 or [email protected] to find out more. Or complete the contact form below.

MADE Cymru is a suite of programmes designed to navigate organisations through Industry 4.0 via collaborative research & development and upskilling. Part/Fully Funded by the European Social Fund/European Regional Development Fund through the Welsh Government. Delivered by University of Wales Trinity Saint David.