R&D Tax Credits and Tax Relief

Read more about R&D tax reliefs & credits and how Luvo Financial can help you secure this valuable tax relief.

R&D Tax Credits

Research and Development Tax Relief (Credits) is a UK tax incentive designed to encourage companies to invest time and money into developing new products, processes and services, or enhancing existing ones.  Companies can reduce their tax bill or claim payable cash credits as a proportion of their R&D expenditure.  

At Luvo Financial, our expert team can help you secure tax credits and tax relief through two different, available schemes to claim the relief.

Claiming R&D Tax Credits under either scheme reduces Corporation Tax liability – if your business has no Corporation Tax liability, you can usually claim the credit as a cash payment.

The average R&D Tax Credits claim for an SME in the UK is £60k!

Eligibility

Often businesses don’t realise they are eligible for R&D Tax Credits, due to low awareness and several common misconceptions – eligible R&D goes way beyond science-based research and development, and is in fact open to every business, regardless of sector. Manufacturing, engineering, IT and the service sector (and others) that have sought to overcome uncertainties, issues or problems, in trying to develop new or improved products, processes, services or systems, are likely to qualify to claim. Businesses don’t have to employ R&D staff (PhD’s or otherwise) nor have to own the IPR from what they’ve done, in order to be eligible to claim.

What qualifies as eligible R&D is essentially the same under both RDEC and the SME R&D Tax Credits schemes, and the relevant legislation and guidelines clearly set-out which scheme companies are eligible for and under which they are able to make a claim.

Typically, R&D Tax Credit / Relief claims average at around £50,000, with about 95% of claims usually settled by HMRC within 28 days of submission.

R&D Tax Credit can be claimed by both Large Companies (via the RDEC scheme) and by Small and Medium-sized Enterprises under the more-generous SME R&D relief scheme.

There are some rules in place regarding what makes a company eligible to claim, namely; the company must be using “science and or technology” in the R&D work, they are “seeking to advance or improve a product, process, service or system”, they “stand the full commercial and financial risk” (of the R&D work), and they are “seeking to overcome technological uncertainty”. However, even if your project was unsuccessful, the uncertainties weren’t overcome and the advance was not achieved, you can still claim for the time and money invested in working to overcome those uncertainties.

 

 

Our role

Over the years, Luvo Financial has developed and maintained a client-focused approach to claiming R&D Tax Credits. We prioritise flexibility and good time-management. We aim to take minimal time from the client, and essentially, do the hard work for them.

Our process works, and is, in part, why Luvo has maintained a 100% success record in our time of providing support in making R&D tax relief claims. Read our R&D success stories here.

Our contingent fees are one of the most competitive in the sector, and are reimbursed in the unlikely event that the claim is denied by HMRC. When you work with Luvo Financial, there is nothing to pay until an engagement has been formally agreed and our fees are success based – ‘no-win-no-fee’! 

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Identify qualifying expenditure

After initially confirming eligibility, we identify qualifying R&D expenditure, according to HMRC rules. As R&D specialists, Luvo eliminate the chances of error i.e. including incorrect expenditure which fails to qualify as R&D – something that can raise an enquiry with HMRC if not done correctly.

Calculate qualifying costs

We calculate and maximise qualifying costs against which you can claim. Without specialist advice, there may be a tendency to over or underestimate qualifying costs. With our detailed knowledge of what does and does not qualify for R&D tax relief, Luvo Financial can save you time and ensure the correct costs are being claimed, and maximised.

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Prepare a Technical Justification Report

We prepare the required Technical Justification Report, that must accompany the R&D claim (amongst other documents). With our extensive knowledge and experience, the R&D specialists at Luvo Financial will ensure this is written and delivered in the way HMRC requires.

Need help with an R&D tax claim? Pop your details in the form below and one of our R&D specialists at Luvo Financial will be in touch to see if we can help you.