Although awareness of the R & D tax credit scheme has grown in recent years, there are still many companies who mistakenly believe that their company or sector does not qualify to make an R & D claim. In reality the government’s definition of a qualifying R & D activity is actually quite broad.
With the average annual claim being worth £54,214 to SME’s alone, our team has put together a quick ‘cheat sheet’ of 5 industries that are rich in opportunity for claiming R & D tax credits.
In a nutshell, what qualifies for R&D Tax Relief? Although there are hundreds of pages of legislation, it often boils down to the following: People solving difficult technical problems.
These are found across every sector of industry. If your company operates in one of these industries and you are not claiming, please contact one of our consultants .
R & D tip: The popularity of cloud technologies is compelling many companies in this sector to offer their services online through a SaaS model. The development of these platforms, where there are technical challenges in achieving performance, scalability or integration often qualifies as R & D expenditure.
R & D tip: Qualifying expenditure for R & D tax relief is not limited to client-facing projects. Many retailers and wholesalers invest in developing solutions that streamline or automate their business operations (for example, software that helps a company manage its stock levels and delivery schedule more effectively).
R & D tip: Software development firms are typically strong candidates for claiming R & D tax relief. Even if a company develops software with similar functionality to one that already exists in the market, the technical challenges faced may be different and thus the resources invested in developing its unique methodology and architecture will still qualify as R & D expenditure.
R & D tip: Claiming R & D tax relief can be particularly valuable to science-based and engineering firms as it helps to offset the expense of testing the application of new technologies and materials. Such activities that are made on behalf of another firm may also qualify.
R & D tip: This sector is the single biggest benefactor of the R & D tax credit scheme with companies investing in new product development, industry compliance and improving their production processes. For more information on R & D tax credits in this sector, click here.
ConclusionThe wide variety of company types found in the top 5 sectors for claiming R & D tax credits reinforces the notion that a large portion of companies that could be claiming R & D tax are missing out.
Even if your company is not in the above sectors, you may still qualify to make a claim. Contact one of our consultants for an obligation-free assessment by phone.