R&D Tax Credits

R&D Tax Credits represent a pivotal government incentive from HMRC, aimed at boosting innovation by offering financial benefits to UK companies. These benefits allow businesses to either decrease their tax liability or receive a cash payment, by claiming back a substantial percentage of their R&D expenditure. Counting King specialises in identifying eligible activities and expenditures to maximise your claim effectively.

To qualify for R&D Tax Credits, your business must engage in projects that seek to make advancements in science or technology. Counting King can assist in evaluating your activities to determine eligibility, ensuring that they are specifically related to your company’s trade and have occurred within the last two fiscal years.

At Counting King, we help you identify qualifying R&D expenses, which encompass staff wages, subcontractor costs, consumable materials, software, and utilities directly used in R&D efforts. It’s crucial to meticulously track these expenses as they relate directly to qualifying R&D activities to ensure your claim is successful.

Routine updates or aesthetic changes that don’t address scientific or technological uncertainties are not considered R&D. Similarly, operational activities like production, sales, and administrative functions do not qualify. Counting King can provide clarity by distinguishing between qualifying and non-qualifying activities.

R&D encompasses activities aimed at resolving scientific or technological uncertainties, whether through creating new products, processes, or software, or significantly enhancing existing ones. Counting King expertly guides companies in documenting these activities to support their R&D claims.

You can claim R&D Tax Credits for up to two years past the end of the accounting period in which the R&D expenditure was incurred. Counting King can help review past projects and expenditures to ensure you don’t miss out on any potential claims.

Typically, HMRC processes R&D Tax Credit claims within 28 days. However, during peak times or for larger or complex claims, this process can take longer. Counting King assists in streamlining your submission to minimise wait times and expedite your payment.

R&D Tax Credits work by allowing your business to deduct an additional percentage of qualifying expenditure from your yearly profit, over and above the normal 100% deduction, effectively reducing your tax bill or increasing your payable credit. Counting King ensures optimal calculation and application of these credits to maximise your financial benefit.

The average claim can vary greatly, usually reflecting the size of the company and the scale of the R&D activities. Through Counting King’s expertise, many of our clients secure claims that significantly offset their R&D costs, ranging from a few thousand to several hundred thousand pounds.

To claim R&D Tax Credits, you need to include detailed R&D expenditure information in your Company Tax Return (CT600) along with a narrative that explains how the projects meet the criteria for scientific or technological advancement. Counting King specializes in preparing these detailed claims, ensuring compliance and maximising your potential benefit.

Absolutely! At Counting King, we assist small businesses in claiming R&D Tax Credits under the SME scheme. This scheme is perfect for companies with fewer than 500 employees and either less than €100 million turnover or €86 million in balance sheet total. Our expertise ensures that small businesses can maximise their claims effectively.

For a robust R&D Tax Credit claim, we help you compile detailed technical reports that describe each project’s scientific or technological advancements and the challenges faced. Financially, you’ll need to gather records of all R&D-related expenses such as staff costs, materials, and software. Counting King guides you through preparing and organising this documentation to streamline your claim process.

Yes, software development projects often qualify for R&D Tax Credits when they aim to advance the underlying technology. This could include innovations in algorithms, architectures, or efficiency improvements. Counting King specializes in identifying eligible software development activities and framing them effectively for tax credit claims.

At Counting King, we calculate your R&D Tax Credit by enhancing your qualifying R&D expenditures by 130% for SMEs, which then reduces your taxable profits or increases your tax credit if you’re loss-making. For RDEC scheme claims, typically accessible by larger companies, we work out a credit worth approximately 13% of your qualifying expenditure.

The SME R&D relief and the RDEC scheme cater to different types of companies. SME relief is more generous, potentially offering up to 33% of your R&D costs back, suitable for smaller businesses. The RDEC scheme, providing around 13% before tax, is available to all companies, including those that do not meet the SME criteria. Counting King can help determine which scheme best fits your business and maximise your benefits.

If HMRC queries your claim, it’s crucial to respond with detailed and accurate information. At Counting King, we support our clients through this process by preparing and presenting all necessary documentation and responses to HMRC, ensuring that your claim stands the best chance of success without delays.