R&D Tax Credits

Research and Development Tax Credits

The Scheme – Explained

What is it?

The Research and Development Tax Credits (R&D Tax Credits) Scheme is designed to reward businesses for solving problems, overcoming challenges, could be bringing something new to market or improvements to something existing. Whenever you spend money on a project that qualifies, you can get a cash reward or a reduction in the amount of Corporation Tax you are paying.

Do I Qualify?
  • You must be eligible to pay Corporation Tax. You don’t need to actually be paying it so you could be in losses or pre trade.
  • You will be spending money on improving a product or service or overcoming challenges.

Your project is likely to qualify if you have;

  • Required the experience of qualified experts.
  • Had an element of trial and error.
  • Been unsure whether you would find the right solution.
  • Been aiming for an advance in your sector.
What are the benefits?
  • Claiming R&D Tax Relief could improve your cash flow, reduce your corporation tax bill and encourage a culture of innovation and improvement in your business.
  • SME’s can claim up to 230% tax relief on qualifying R&D costs.
  • The benefit can be taken as cash or future tax relief.
  • You can backdate a claim for the two previous financial years.
  • You can continue to claim for each subsequent year where you have qualifying activity.
Our fee:
  • We don’t charge unless you receive a benefit, so it’s risk-free for you.
  • Our fee covers a completely end-to-end service. We don’t tie you into fixed-term agreements and there are no hidden extras.
  • We charge our fee as a percentage of the benefit you receive which is 20%.
  • We are flexible as we do realise that each company along with their projects are unique so the 20% is usually for the first claim and then we look to reduce our fee for large and or/repeat claims.
  • You only pay after you’ve received your payable credit and/or Corporation Tax is agreed.

Facts and figures:

  • More than 68,000 businesses were funded through the R&D Tax Credits Scheme in the 18/19 tax year.
  • SME’s can claim up 33p for every £1 spent on qualifying R&D activity.
  • During the 18/19 tax year SMEs made up 96% of all R&D Claims submitted to the HMRC.
  • SMEs can expect a return of up to 26% of innovation costs; that is £26,000 for every £100,000 spent on development.
  • RIFT’s total amount of qualifying expenditure for Software in 2020 was over £44mil
  • RIFT’s total amount of qualifying expenditure for Manufacturing in 2020 was over £22mil
  • RIFT’s Average claim paid out for Software in 2020 was over – £47,000
  • RIFT’s Average claim paid out for Manufacturing in 2020 was over – £30,000

R&D Funding Overview:

With funding, there is no “one size fits all”. From cash injections for start-ups to new directions for established SMEs, you need advice you can trust on financial support, grants, and incentives. RIFT have teamed up with funding experts to bring the opportunities right to your door.

Patent box

Patent Box is a rewarding but under-claimed innovation scheme. It offers further deductions calculating taxable profits, with relevant intellectual property profits taxed at a reduced corporation tax rate of 10%.

R&D Bridging

For many companies using R&D Tax Credit, waiting for HMRC’s cheque to arrive can be tough. ‘Bridging loans’ can be a real boost to businesses needing a quick cash fix.

Find out more

If you would like to find out more about the scheme and what you could be entitled to then please do reach out to the team at RIFT R&D.

research and development tax credits statistic - businesses funded
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R&D Tax Credits Case Study

  • Sector: Manufacturing
  • Nature of R&D: Product Design – Develop a unique method of charging mobile
    device without impact on décor. 
  • Overview: the company engaged in a number of R&D projects
    to establish suitable methods to incorporate charging points
    within selected pieces of furniture for a smart and more practical
  • Eligible expenditure identified: £23,929.08
  • Tax relief generated: £5,910.48