September 2022

How can your business benefit from the recent changes to R&D tax relief?

HMRC are changing the R&D tax relief regime. This means there are more chances than ever for SMEs to claim money for a growing list of eligible activities. If you’re not clear on how these might affect your business, please contact one of RfM Transform’s R&D experts today.

The recent R&D tax claim changes, most of which will come into force for claims covering 2023, are quite technical. For example, costs related to software licenses and to cloud services are now included. Other changes mean that companies that are data driven, or that use AI and machine learning, might also be eligible for R&D funds. 

Of course, these days the use of AI and machine learning techniques are not only limited to software companies. Lot of companies involved in sectors such as traffic management, recycling, manufacturing, logistics and many more all use AI. And so, companies in any of these varied sectors may have a legitimate claim to R&D tax relief.

Data intensive operations involving digitisation and automation are increasing in almost every industry. Some of the work that has been done in these areas, innovating and creating systems and solutions to improve business efficiency and productivity, might also be eligible for tax relief.

Again, if you’re not clear how your use of technology might already mean you are eligible for R&D tax relief, please get in touch for a FREE consultation today.

R&D activity by SMEs is a vital part of how every country boosts its economy and creates new jobs. Therefore, the new reforms focus on innovation in the UK. Consequently, there will be restrictions on the use of overseas sub-contractor costs as a part of R&D expenditure in future claims. There will, however, be exemptions when the use of overseas expertise is vital. Examples of this would include, for example, research on vaccines or in deep ocean technologies.

It is important to stress, however, that R&D tax relief is not something that is only available to researchers, deep sea divers or laboratory techs! Businesses innovate every single day. If you have ever sat down and worked out how to fix a problem in your business, for the business itself or for a client, to improve a process or develop a solution, you might be eligible for R&D tax relief.

Get in touch today and we will help you understand whether your business is eligible. 

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There are also changes of a more administrative character coming down the line. These measures will increase the overall quality of the incentive. Future R&D claims will need to be endorsed by directors of the company and, if using agents, the agents’ details and qualifications must also be given. 

To ensure a successful claim, R&D expenditure and use of sub-contractors should be recorded separately in the annual accounts. Staff involved in R&D projects should keep separate timesheets and there should also be an activity plan. For future claims, HMRC will also require advance notification if a company are planning to submit claim.

These upcoming changes will make R&D tax claims more complex, and they may even affect retrospective claims. So, if you want to ensure that your business is able to claim, please get in touch today for a FREE consultation today.

The team at RfM Transform is here to help you keep on top of your claims.

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Could you be missing out on a tax-free lump sum? 

To discuss your R&D activity and how we can help you secure R&D tax credits, please contact us online.

Or call Tony Backhouse on 07969 900864.