In recent years, there’s been an explosion of innovation, with companies pioneering change across many sectors, implementing radical changes and introducing innovative new sciences and technology. But all of this comes at a cost, which is why the government offers a tax benefit in the form of Research and Development (R&D) tax credits to encourage continued development.

R&D tax credits are a top government incentive intended to encourage and reward companies who conduct research and development activities. A really valuable asset and a valuable source of cash, R&D tax credits essentially help businesses accelerate their R&D activities by providing the infrastructure to encourage growth and continued development. And here’s the best bit – the relief can be claimed even if the project is unsuccessful.

However, quite often businesses assume their day to day activities aren’t eligible to claim R&D tax credits as they aren’t decked out in lab coats hunched over test tubes.

In fact, a Smith Cooper client recently benefited from the R&D tax credits in a business that would not have previously been thought of as eligible. The client hired out a range of temporary structures such as exhibition halls, hospitality and trade stands for the UK outdoor show and event marketplace. The company applied for two advances in their range.

  1. Researching suitable demountable containers across European manufacturers and developing visible signage for them that would withstand the loading/unloading and flat packed transportation procedures.
  2. Developing a lightweight, hard-walled sectional stable which can be safely stillaged and repetitively erected, whilst withstanding damage from horses and manual handling. This product was a development of existing products already provided by the company.

In both these cases the developments could be considered as standard additions to an existing product range and would not immediately spring to mind as eligible for R&D tax credits.

However, our client applied for, and successfully received R&D tax credits for both developments. The company was effectively reimbursed for a substantial amount of costs incurred whilst developing their product range.

Other examples of industries who are benefitting from R&D tax credits that may surprise you include:

  • Manufacturing and engineering
  • Food and beverage
  • Software development
  • Agriculture
  • Consulting
  • Medical
  • Property

Research conducted by RIFT Research and Development has revealed the UK’s property sector is leading the way when it comes to the amount awarded in R&D tax relief as a percentage of expenditure, through the disruption of traditional practices.

So, if your business is driving advancement in specific field, you may unknowingly be undertaking R&D qualifying activities.

Can you afford to miss out on £50,000?

The average company claims in excess of £50,000 in R&D tax credits, having a significant impact on business capabilities.

To understand more about the type of projects that qualify for R&D tax credit purposes, we’ve put together a handy Research & Development Tax Credits guide, which you can download by clicking here. Alternatively, to view online, click here.

If you’re still unsure whether your businesses is undertaking R&D activities that qualify for tax credits, get in touch with a  member of our dedicated corporate tax team who have extensive experience supporting clients throughout the claims procedure, securing the optimal outcome.

Our specialists recognise the importance of handling your tax affairs in a way which helps you achieve your strategic objectives whilst maximising the benefits available to your business.