Are you missing out?

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The number of R&D claims made by SMEs has risen by 22% in the last year.*

R&D tax relief came into effect in 2010 with the aim to encourage UK based companies to spend more on Research and Development.

A cash payment or a reduction on a company’s Corporation Tax liability is given to a businesses that spends money developing new or enhancing products or services in science or technology.

The increase of 22% was primarily driven by a rise in the number of SME claims, which totalled 21,865 in 2015-16, up from 17,875 in 2014-15.

HM Revenue & Customs (HMRC) said the increase in the number of claims is likely to reflect the effect of changes made to the SME scheme from April 2012 onwards.

The removal of the requirement for a minimum R&D expenditure of £10,000 has meant that more companies are eligible to apply for the relief.

The most common way for SMEs to claim R&D tax credits was by a deduction from corporation tax (CT) liability, with 12,700 claims made this way for 2015-16, compared to 4,420 claims made for a payable credit.

“Many businesses don’t know they can claim R&D tax relief, or how to go about it,” said Peter Way-Rider, tax manager at Ellis & Co.

“There are a number of costs that qualify for R&D including employee costs, materials, utilities and software.

“The normal time limit for making your claim is two years after the end of the relevant Corporation Tax accounting period.

“This means that even though you may have already filled a Corporation Tax return, you can amend this to reflect any relevant R&D expenditure as long as the amended return is filled within the time limits.”

Ellis & Co can tell you if you are eligible for R&D relief, the full list of expenditure allowable and how much you can claim.

"With December 31 approaching ever more quickly, the opportunity for companies to make an R&D claim for the year ending December, 31, 2015 is running out," added Peter. 

"This relief is extremely valuable so if you think you could be entitled to make a claim for R & D, please contact us as soon as possible."

To find out more contact Peter Way-Rider on 01244 343504.