R&D tax relief

Tax relief opportunities for research and development activities

If your technology or creative business is involved in original problem-solving, Alchemy could help you claim valuable research and development tax relief.

If you’re a software developer or operate a creative agency and haven’t previously considered claiming R&D relief, contact us today.

Types of R&D tax reliefs

There are two types of corporation tax relief for companies engaging in research and development:

  • Small and medium sized enterprises (SME) R&D relief
  • The research and development expenditure credit (RDEC)

They’re designed to stimulate innovation – to prompt UK firms to explore new territory and come up with genuinely new technology, whether in the form of hardware or software. They offer businesses working on projects which:

  1. seek to achieve an advance in science and technology
  2. tried overcame uncertainty while doing so
  3. tackling a problem that couldn’t easily be worked out by another professional in the same industry.

Which applies to your business?

SME R&D tax relief

You can make SME R&D tax claims if you employ fewer than 500 people, turn over less than 100 million Euros, or have a balance sheet showing less than €86m.

SME R&D tax relief, if it is deemed to apply to your project, would allow you to deduct an extra 130% of your qualifying costs from yearly profit, on top of the usual 100% deduction – 230% in total.

RDEC

The research and development tax credit, on the other hand, replaces a relief previously available under what was known as the large company scheme. It’s targeted at bigger businesses but can also be claimed by SMEs which have been subcontracted to carry out R&D by a large company.

RDEC is calculated at 12% of your company’s qualifying R&D expenditure incurred from 1 January 2018. If you made a loss, you can use the credit to cover the liability; if you made a profit, it will come as a cash payment.

Speak to a R&D tax consultant

The varying criteria influencing your eligibility for R&D tax relief can be confusing yet will also underpin the success of your application. Talk to us for advice and assistance.

Our approach to R&D tax relief

  • Analysis of your business eligibility
  • Assessment of your claim
  • R&D claims built into your tax return

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