UK R&D Tax Relief

1

Does anyone else in the UK recoup anything from HMRC via the R&D Tax Relief? Internal Projects or anything like that?
Interested if there's anything I could use...

2

Hi James

I don’t have too much to offer, but due to the lack of responses here, I’ll do my best.

We’ve been claiming R&D Tax Relief as part of our end of year UK tax return for a number of years now. It is very difficult to quantify, but all staff keep timesheets here, not to check up on the staff, but to establish the true costs of projects and for on demand work billing.

Our timesheets are categorized into things like support, development, training, etc. and we include an R & D category when we can justify this. We tend to include work that is combining existing technologies for innovative use. For example, the investment in time I’ve put into the scripted summary field replacement module would be included within this, as there is no financial gain from any customer and it is researching alternative methods for using the software to try to give us a competitive advantage, or publish in the community as appropriate.

We get calls frequently from companies cold calling offering their services to help take advantage of the R & D tax relief, which thankfully I can inform them that we already do this (annoyingly they then ask how), but unless you are earning serious money, I’d suggest keeping away from them (they are after their cut of course) and discuss with your accountant.

The tax relief you are likely to get is directly related to each person’s salary within the company doing the R & D, so if you are a company director of a limited company and use dividends to supplement your salary, you may find that there is very little to be gained.

That’s about the sum knowledge I have and I hope it is of some help.

All the best
Andy

3

Thanks Andy, very informative. Interesting about the Salary based element - I'm not sure it's going to be worth it based upon that, but I will do the sums and see what comes out. Look forward to catching up with you at some point in the future!