Frequently Asked Questions

FAQs

How do I know if I’m carrying out R&D?
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If you are creating a new- or improved product, process or service, your business might be carrying out Research and Development (R&D). You will probably be attempting to solve a problem where no solution is evident. This can take many forms and R&D projects can include work undertaken for a client as well as your own business activities.

What records do I need to keep for an R&D tax credit/refund claim?
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There is no fixed record-keeping system for a Research and Development (R&D) Tax Credit/Refund claims. HMRC accept that first-time claimants are unlikely to have detailed contemporaneous records to support all their R&D work.

Can pension contributions be included in a R&D tax Credit/Refund claim?
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Employer pension contributions are classed as qualifying expenditure for the purposes of a Research and Development (R&D) Tax Credit/Refund claim. As long as the staff member is involved in your R&D project, you can include their employer pension contributions in your claim

What costs qualify for R&D Tax Credits/Refunds?
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Eligible R&D Expenditure Revenue includes the following costs which can be included in your R&D claim: Staffing costs, Subcontracted R&D, Externally Provided Workers (EPWs), Consumables, Software, Payments to the subjects of clinical trials.

How will I receive my R&D Tax Credits/Refunds?
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You might receive it as a cash payment, a Corporation Tax reduction, they carry forward or back of an enhanced loss or as a blend of these.

How far back can I claim R&D Tax Credits/Refunds?
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The Research and Development (R&D) Tax Credit/Refund claim time limit is two years from the end of your accounting period. Before this period ends you must submit a R&D Tax Credit/Refund claim for any qualifying expenditure that you’ve identified during that period.

When will I receive my claim?
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HMRC aim to make payment in 28 days

Can I claim R&D Tax Credits/Refunds on subcontractors?
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Yes, an SME carrying out Research and Development (R&D) will usually be able to claim 65% of the costs paid to any subcontractor for qualifying activities.

How do you identify how much R&D each staff member does?
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There are a number of ways of identifying how much Research and Development (R&D) work each staff member does. The way an employee’s time is allocated will depend on the nature of the R&D work you have undertaken and what records you have on how staff time was spent on these activities.

How long does it take to receive my money?
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HMRC aim to make payments within 28 days for SMEs claiming Research and Development (R&D)Tax Credits/Refunds. Corporation Tax repayments can be much quicker and sometimes come through within a week of your claim being filed.

What happens if I have no records of my R&D?
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Record-keeping is an important part of a Research and Development (R&D) Tax Credits/Refunds claim. HMRC expect to see some form of records. Good records often serve to maximise a claim’s value. If you have no specific records for your R&D Tax Credit/Refund claim, all is not lost. Call us, we can help.

Do R&D Tax Credits/Refunds apply to a sole trader?
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Research and Development (R&D) Tax Credits/Refunds can only be claimed by companies that are liable to pay UK Corporation Tax. Sole traders do not pay UK Corporation Tax and, as a result, they cannot claim R&D Tax Credits/Refunds.

What are the costs?
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Innovation in Life won’t charge you unless your claim is successful, so there is no risk to you or your company. Our fee is a percentage of the refund you receive and includes the full service provided, there are no hidden extras. We will only charge you for this once you have received your refund.

Is there a free consultation available?
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We offer a no obligation 15-minute telephone conversation, so we can highlight areas of qualifying activity and the potential value of your claim.

How long does it take HMRC to review a R&D Tax Credit/Refund claim?
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HMRC aims to process Research and Development (R&D) Tax Credit/Refund claims for SMEs within 28 days. However, the length of time it takes for HMRC to review an R&D Tax Credit/Refund claim will depend on the complexity of your structure and accounts, as well as the nature of the claim itself. It may also depend on what time of year your claim is submitted

Is there a minimum amount of expenditure for R&D Tax Credit/Refund claim?
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No, you do not need to have spent a minimum amount on qualifying Research and Development (R&D) to submit a R&D Tax Credit/Refund claim to the HMRC.

I’ve heard the phrase ‘competent professional’. What is this?
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A competent professional is someone in your company who has a successful track record, notable experience and skills or qualifications in your relevant area of science or technology. For software projects, this may be a developer; or, in a manufacturing business, it might be an engineer.

Do employee expenses such as travel and subsistence costs qualify for R&D?
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Some types of reimbursed expenses can be included in Research and Development (R&D) Tax Credit/Refund claims. A company may reimburse expenses incurred initially by an employee, and such reimbursement may constitute qualifying staffing costs.

How much could I claim?
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We offer a no obligation 15-minute telephone conversation, so we can highlight areas of qualifying activity and the potential value of your claim.

Can you include VAT in an R&D Tax Credits/Refunds claim?
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You cannot normally include VAT costs within a R&D Tax Credit/Refund claim. The exception to this rule is if your VAT costs are not recoverable through a VAT return. Whether this applies to you or not will depend on your VAT classification.

Which R&D Tax scheme is right for my business
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We offer a no obligation 15-minute telephone conversation, so we can highlight areas of qualifying activity and the potential value of your claim.

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