Research & Development relief

23 March 2016

The best form of tax relief available – a boast fully justified for small and large companies claiming research and development relief.

We have recently completed two claims for manufacturing business; for the small company – a company turning over £4m, they have received £183k in cash for a claim covering two years. For the large company, a £19m turnover business, they have received a cash credit for £379k, again over two years, for just doing their normal day to day work. A significant boost their cash flow and profits.

Is this a tax scheme? No. It is actively promoted by HMRC and is part of the Government’s initiative to help businesses engaged in research and development (R&D).

I don’t do R&D. I don’t employ the proverbial “man in the white coat” doing experiments – No, but R&D is much wider than that. If you are taking a product or process and changing it, and in doing so improving it, you are likely to qualify for R&D relief.

I am not a manufacturing company, will it work for me? It is designed for all businesses, provided that they can demonstrate technological advancement.

Do I receive cash back from HMRC? It depends – you may receive cash by reducing your corporation tax liability for the current year or on monies paid in previous years. You may create a tax loss which you can use to reduce corporation tax charges in the future or you could convert losses to cash. It depends on the timing of your claim, the size of it and your own company’s circumstances.

You mention large and small companies above, is there a difference? Yes, in the way in which the R&D tax relief system works. Both sizes of companies can benefit.

If I think this might be worth investigating what do I do now? Speak to Chris Barlow or Emma Clewes at MHA MacIntyre Hudson Birmingham office. We have worked closely with manufacturing businesses for many years and have completed many claims for companies with a 100% success rate.

I already have an accountant, does this matter? No, it may be that your accountant does not offer this service or, alternatively we can complete this as a standalone service. 

What does it cost? Provided the claim is successful we take a percentage of what is recovered. If the claim was not successful there is no charge.

If you would like to discuss further, please contact Chris Barlow at chris.barlow@mhllp.co.uk or Emma Clewes at emma.clewes@mhllp.co.uk. Alternatively, you can call 0121 236 0465.

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