At R&D Claim Consultants, we specialise in conducting thorough financial consultations, ensuring precise identification and documentation of all eligible R&D-related expenses according to HMRC guidelines:
– Understanding Accounting Periods: We confirm your accounting periods to accurately align R&D expenses with the appropriate periods, ensuring compliance with HMRC regulations.
– Identifying R&D start and finish periods: With a keen eye for detail, we pinpoint the beginning and end of R&D projects in accordance with HMRC guidelines, ensuring that all relevant expenses are accounted for.
– Staff costs: We track and document all staff costs directly involved in R&D projects, including salaries, National Insurance contributions, employer pension fund contributions, bonuses, and eligible reimbursed expenses.
– Externally Provided Workers (EPWs): These are the costs paid to a third party for staff who are directly involved with the R&D project. They are not employees or subcontractors. In most cases, you can claim up to 65% of the payments made to the external staff provider.
– Subcontractors: In general, you can claim 65% of the payments made to “unconnected” subcontractors in the SME scheme. However, you can qualify for up to 100% of the expenditure if the subcontractor is a connected party (i.e. a parent company, a subsidiary etc.).
– Consumable items: Items that are directly employed and consumed in an R&D project can also qualify. This include physical materials and hardware, as well as utilities such as the power, water and fuel used directly in the R&D. Correctly proportioning consumables to an R&D activity can be a challenging exercise, requiring a strong understanding of HMRC’s internal manuals.
– Prototypes: You can often include the cost of designing and constructing a prototype. However, the purpose of the prototype must be to resolve some scientific or technological uncertainty. If you design the prototype for a commercial function (eg. as a demonstration model at a trade show) then it cannot qualify. Equally, if you later sell the prototype to a customer then the cost of the build cannot qualify as R&D.
– Software: We adeptly manage the cost allocation of software used in R&D projects, ensuring appropriate inclusion based on its usage and relevance to R&D activities.
– Research contributions: This covers payments to third-party organisations for conducting research on your behalf. While large companies can claim these as eligible R&D costs, SMEs are not eligible. The research conducted must be pertinent to your field or scientific pursuit and overseen by either an individual or partnership, or a qualifying body such as a charity, higher education institute, or a named scientific research body. Typically, the organisation conducting the research should be based in the UK, although HMRC does recognise some qualifying overseas bodies.
– Clinical Trial Volunteer costs: These play a crucial role in pharmaceutical R&D endeavours. Unlike other categories, these costs are not encompassed elsewhere. Businesses are eligible to claim expenses linked to recruiting and compensating volunteers for clinical trials. HMRC has a specific guide on this matter.
– Cloud Computing and data: As of April 2023, companies can seek relief for expenses related to utilising third-party resources and services for acquiring, analysing, and storing big data. This includes leveraging digital twinning, simulation, and prototyping, among other applications.
– Pure Mathematics: As of April 2023, R&D tax relief was expanded to encompass pure mathematics as a qualifying cost. This expansion aims to support the increasing R&D driven by mathematical advancements, benefiting sectors like Artificial Intelligence, quantum computing, and robotics. This inclusive approach not only bolsters industries where the UK holds a competitive edge but also strengthens sectors such as manufacturing and design.
– Qualifying Indirect Activities: We assist in identifying and documenting essential ancillary tasks integral to R&D initiatives, such as staff hiring, laboratory leasing, and research equipment maintenance, to ensure your claim’s accuracy and completeness.
With our meticulous attention to detail and in-depth understanding of HMRC guidelines, clients can trust R&D Claim Consultants to manage any financial consultation effectively, ensuring a robust foundation for a successful R&D tax credit claim.
