Lessons Learned About Businesses

Understanding HMRC R&D Tax Credits

By and large, this post covers as much as can be on the innovation, research and development grants. See more on this page on the HMRC R&D Tax credits.

If at all you are established as a corporation, then you need to know of the fact that there are the R&D tax credits are essentially corporation tax relief programs that help lower your corporation or business’ tax bill. For the small and medium size businesses, they can opt for the tax credits which are in most cases reimbursements paid out by the HM Revenue and Customs. In order for you to qualify for the R&D tax credits, there are some basic qualifications that one should have met. First and foremost, your firm must be liable for corporation tax. Second is the fact that the R&D project must be one that qualifies for relief.

Moving on, the other issue that needs to be well understood is what kinds of research and development projects would actually be considered to be qualifying for R&D tax credits for tax purposes. In order for your project to qualify for the tax credits under the schedule, your projects must satisfy the rather detailed HMRC qualification criteria. In a general sense, qualifying projects would be such that generally help advance science and technology. By and large, these projects need to be such that actually relate to the company’s existing or intended trade. For the small and medium size business intending to claim these credits, they need to own intellectual property that may be arising from the project.

The R&D tax credits are open for claim by both the small and medium scale business and as well the larger corporations. This is all provided that the company is liable to corporation tax.

By and large, even though from appearance it may seem so easy and simple to tell what it is that qualifies for the R&D tax credits, the reality is that the finer details of what qualifies expenditure happen to be telling a lot more of stricter regulations for tax purposes. Therefore you see the fact that it wouldn’t be so advisable for you to assume that all items of your R&D expenditure would be qualifying for R&D tax credits. You would as such be advised to check with a HMRC R&D Tax expert or check the R&D tax relief rules and guidance on how to apply here.

All in all, it can be well said that the rules and all that goes into R&D tax relief and credits can be quite complex and overwhelming and as a general tip to get around them, get in touch with the experts.

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