Research and Development (R&D) tax credits are available to support companies that work on innovative projects within a wide range of industries. They can be claimed by any companies that seek to research or develop an advance in their sector. They can even be claimed for projects that turn out to be unsuccessful.

To claim R&D tax relief company’s projects must simply meet HMRC’s definition of R&D.

What Projects Count as R&D?

To qualify for R&D tax credits companies must take on projects that are designed to make an advance within their industry. These projects must relate to the company’s trade in some way, whether that be their existing trade, or a new one that they intend to start up as a result of the R&D activities that they are carrying out.

To qualify for R&D tax credits companies are required to explain how a project:

  • looked for an advance in science and technology
  • had to overcome uncertainty
  • tried to overcome this uncertainty
  • could not be easily worked out by another professional in the field

Researching or developing a new process, product or service, or improving an existing one generally qualifies as R&D.

Advances in the field

Companies project must be designed to create an advancement in not only their business but the sector that they are in. The process, product or service developed or enhanced can still qualify for R&D relief if it’s previously been developed by another company, providing that it is not publicly known or available.

Show that other professionals in the industry could not work this out

Companies should be able to explain why other professionals in the industry could not easily work out their advancements. This can be achieved through showing that other attempts to find a solution to the problem have failed and explaining any uncertainties that have been involved.

Show there was uncertainty

Uncertainties exist when experts on the subject of a project cannot say if something is technologically possible or how it can be achieved. This means that to qualify for R&D companies working on projects must not already know about the advancement or how they ae going to achieve the advancement when they begin their project.

Explain how you tried to overcome the uncertainty

Companies must be able to show that their projects required research, testing, and analysis. They must be able to explain the work they carried out to overcome the uncertainties that they faced at all stages of their projects. This can be as simple as describing the successes and failures that they encountered during the project.

Enhance Consultants – Here to Help

Here at Enhance Consultants we are experts in R&D tax relief and can easily identify is companies and their projects are eligible. If after reading this you are still uncertain about your eligibly, don’t hesitate to contact our friendly and professional team who are always happy to help.

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