Understanding HMRC R&D Tax Credits
Here in this guide, we will be taking a look at all you are to know on the innovation, research and development grants. Learn of the R&D tax credits.
If at all you are established as a corporation, then you need to know of the fact that there are the R&D tax credits are essentially corporation tax relief programs that help lower your corporation or 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. As a matter of fact, there are some basic qualifications that one ought to have met in order to qualify for the R&D tax credits. One of these would be such as the fact that the firm you run should be one that is liable for the payment of 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.
The next question would be what it is that actually qualifies, as an R&D project, for tax purposes. In order for your project to qualify for the tax credits under the schedule, your projects must satisfy the rather detailed HMRC qualification criteria. A project would generally qualify for the tax credits if they happen to provide an advance in science and technology. By and large, these projects need to be such that actually relate to the company’s existing or intended trade. 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.
As for who qualifies, these research and development tax credits can actually be claimed by both the SMEs and the larger companies. The one must factor is that your firm should be liable to the payment of 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. You would as such be advised to check with a HMRC R&D Tax expert or check the R&D tax relief rules and guidance on how to apply here.
In a nutshell, R&D tax credits can get pretty complex making it so advisable for you to contact the experts and specialists in HMRC R&D Tax credits for the necessary help for your way out.