A Simple Plan: Taxes
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.
The research and development, R&D, tax credits are corporation tax relief programs that will help a long way in helping reduce your business tax bill. For the small and medium size businesses, they have the alternative of going for the tax credits instead which would often come in the form of a cash sum that is paid by the HM Revenue and Customs, HMRC. 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. The other qualification that has to be met would be such as the fact that the project that you will have undertaken should be one that actually qualifies for the R&D tax 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. Essentially for your project to qualify for these tax credits, they ought to have at the very least met and satisfied the somewhat detailed HMRC criteria. In a general sense, qualifying projects would be such that generally help advance science and technology. This project should be one that is actually related to what your business does or intends to do when established, for the startups. And looking at the SME claims for these tax credits, the small and medium size businesses that intend to claim them should be such that actually will or must own intellectual property that arises out of the project.
By far and large, all companies that meet such basic criteria can make a claim for the R&D tax credits from the HMRC, both the small and medium businesses and as well the larger corporations. This is all provided that the company is liable to corporation tax.
While it may so sound so simple to know of what it is that qualifies for the tax credits, the fact is that there is much more to the rules that define the qualifying expenditure when looked at from a taxation perspective. 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. From this, we see the fact that it would be so important and advisable for you to contact a HMRC R&D tax experts and or check the R&D tax relief rules here so as to source for the guidance required for you to make such a successful application for these tax relief and credit programs.
Generally speaking, R&D tax credits can be quite confusing and really complicated for the untrained and for this reason, it would pay for you to think of getting in touch with the pros.