How I know if I am conducting R&D?
If you’re developing a novel or enhanced product procedure or service, your company may be carrying out research and development (R&D). You’ll likely be attempting to resolve an issue where no answer is clear. This can manifest in various ways. And R&D projects can include work undertaken for a client as well as your own business.
The government’s definition of R&D is purposefully broad. Whatever scale or sector, if your company is taking a risk by attempting to ‘resolve scientific/technological unknowns’ then you may be carrying out eligible activities. This could involve:
Creating new products, processes, or solutions.
Modifying or altering an current product, procedure, or solution to make it better.
This means that if you’re not sure whether your project is scientifically or technologically possible or you’re unsure How to calculate R&D tax Credits UK to accomplish it practically, you could be addressing unknowns and therefore qualify for R&D tax credits.
Where does R&D begin and finish?
R&D work begins when a initiative seeks an improvement in science/technology and concludes when the project’s uncertain elements have been overcome. Any user tests or commercial marketing work after resolving the project’s uncertainties will not be R&D.
How can I tell if my initiatives qualify for R&D tax relief?
For a project to be eligible as R&D, you should have set out to achieve an advance. That advance must be in the area of science or technology, not just in your business’s own knowledge. The initiative can still be R&D if the improvement has already been achieved but the specifics are not readily available because for example they are a trade secret.
It’s crucial to remember that R&D is inevitably not always fruitful. If your initiative is ultimately unsuccessful but sought a solution which was not evident at the outset, it could still be R&D.
What kind of initiatives do not qualify for R&D tax relief?
Typically, standard replication of current items, procedures, substances, equipment, or services will not usually be eligible as R&D. Efforts to improve the cosmetic or aesthetic qualities of a process, material, device, product, or solution will not itself be R&D. However, work to achieve specific appearances through the use of tech can still be eligible.
At Hamilton Wood & Company, our staff comprises not just certified tax consultants but also industry experts, attorneys, ex-HMRC officers and even a rocket scientist!
We use a constantly-updating method to prepare R&D tax credit claims that meet HMRC’s high standards – and deliver maximum value to your business.
If you’re not sure whether your efforts are eligible, we’re here to help.
