Category: Tax

R&D Tax Credits Explained

01 May 2020

In 2000, the government created the research and development (R&D) tax credits scheme to encourage innovation and increase spending on R&D activities.

During the coronavirus pandemic, many businesses are turning to R&D tax credits to provide extra liquidity and help secure their futures.

R&D is a Corporation Tax relief that may reduce your company’s tax bill if your company is liable for Corporation Tax or, in some circumstances, you may receive a payable tax credit.

R&D takes place when a project seeks to achieve an advance in overall knowledge or capability in a field of science or technology. Businesses often don’t realise that they qualify for R&D tax credits or that they are not claiming their full entitlement. However, any company that spends on innovating, improving, or developing a product, process or service could qualify. 

It is worth considering your business's activities to assess whether you can claim R&D tax credits.HMRC notes that credits can also be claimed for unsuccessful projects.

Amal Shah, Tax Director at Gerald Edelman explains further why more companies are using the scheme during the coronavirus crisis and what businesses can claim here.

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