Understanding HMRC R&D Tax Credits
Read on in this guide and learn as much on the innovation, research and development grants. Read on and learn 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 can opt for the tax credits which are in most cases reimbursements paid out by the HM Revenue and Customs. 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. Second is the fact that the R&D project must be one that qualifies for relief.
So what qualifies as R&D for tax purposes? For your project to qualify, it generally has to meet the rather detailed criteria set out by the HMRC. 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. For the small and medium size business intending to claim these credits, they need to own intellectual property that may be arising from the project.
As for who qualifies, these research and development tax credits can actually be claimed by both the SMEs and the larger companies. This is all provided that the company is liable to corporation tax.
In as much as the qualification for the credits may sound so simple, the reality is that there are lots of strict rules that will count for what qualifies as expenditure from a taxation perspective. Thus it would not be as advisable for you to assume that all of your expenditure would qualify 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.
All in all, it can be well said that the rules and all that goes into R&D tax relief and credits can be quite complex and overwhelming and as a general tip to get around them, get in touch with the experts.