Research & Development (R&D) Tax Credits are a government incentive to promote innovation for UK companies. A common misconception is that only scientific or medical research companies are eligible for these credits, but many businesses within the rural sector are undertaking research and development.
Did you know that the average SME claim in 2020 resulted in over £10,000 of cash savings for business owners? At Roake & Cook, we can help identify qualifying projects and assist you in claiming valuable tax and cashflow savings. By preparing a claim for you, we can ensure you don’t miss out on financial incentives offered by the government.
Contact us today to discuss R&D opportunities for your business.
Research & Development Tax Credits
Roake & Cook’s tax advisers are able to determine if you are eligible, what qualifies as R&D, and what costs qualify. Limited companies in the UK that are subject to Corporation Tax and have undertaken qualifying research and development activities and incurred costs relating to these activities, are eligible for R&D tax credits.
You are required to research or develop a new process, product or service, or improve an existing one in order to be eligible for credits. This project must:
- Aim to create an advance in the overall field, not just for your business
- Relate to an existing trade or one you intend to start after R&D
- Be an advance if being developed elsewhere, but it is not publicly known or available
The incurred costs relating to the activities that qualify for the tax reliefs include:
- Staff costs – salaries, employer’s NIC, pension contributions and reimbursed expenses
- Subcontractors and freelancers
- Materials and consumables – materials being used to create a prototype or testing a process, plus heat, light and power that are used or transformed during the R&D process
- Some types of software used in the R&D
- State funded grant aid can affect the qualifying costs
There are many benefits for companies to claim research and development tax credits, not including the ability to provide innovation and value to your sector. Small and medium-sized enterprises (SMEs) can receive tax relief of up to 230% on the qualifying R&D costs. They can also claim tax credit if the business is loss making, worth up to 14.5% of the surrenderable loss. For larger companies, there is the Research & Development Expenditure Credit (RDEC) available; if you’d like to find out more about the types of tax credits available for your business or you’d like tax advice from Roake & Cook, talk to our advisers today.
Rural & Agricultural Research & Development
As mentioned above, we understand that rural and agricultural businesses are undertaking research and development to continually establish innovative processes that will improve several farming factors. Challenges regarding quality, output and efficiency can be addressed by implementing new techniques and processes; soil quality, crop productivity, pest control, biodiversity, etc, can all benefit from innovation. The aim of R&D is to enhance these areas for the entire sector.
Rural & Agricultural R&D examples include:
- Introducing different methods of pest control, irrigation systems, pesticides and water treatment
- Developing new types of feed for livestock; trialling different feeding times and rations
- Improving animal health and welfare; introducing different antibiotics; implementing methods to reduce mortality
- Growing different varieties of crop with enhanced properties, in varied types of soil, or in a particular climate
- Designing agricultural machinery, equipment, and structure for food engineering and agricultural processing
Are you currently involved in some projects and wondering if you could be eligible for agricultural R&D credits? Get in touch with Roake & Cook rural and agricultural accountants to discuss your innovations today.
Discuss R&D With Roake & Cook
Whether you’re already involved in innovative projects for your industry or you are looking to start something new, we can help and advise you to maximise the relief for the benefit of your business. Over the years, Roake & Cook accountants have gained a huge amount of experience in the rural sector assisting and giving Canterbury R&D advice, claiming tax relief, and encouraging innovation.