Tax Relief just got interesting

The thing about breakfast briefing meetings is you never know just who you might bump into and what you might learn.

Following a very early start one dark winter morning I recently discovered there really is more to corporate taxation that I realised.

Not expecting accountants and market researchers to share a great deal of common ground, other than perhaps a shared love of croissants, I was very interested to hear about Research & Development (R&D) Tax Relief.

Swift Research supports numerous fmcg organisations, constantly testing new ideas, prototypes and formulas. Our market research services form one of many parts in the overall npd cycle, and for those who commission our services, consumer testing and input is a really valuable element of the R&D process.

It struck me that many of our clients may also be in the dark about this and its particular relevance in their business.

According to HMRCgovuk:

"R&D tax relief supports companies that work on innovative projects in science and technology."

This includes support on aspects of day to day running costs including dedicated software, consumables, staff and subcontractors.

As a sub contractor to organisations undertaking R&D work, in certain circumstances research services such as those provided by Swift may well be eligible for inclusion in the tax relief through this route.

For tax relief purposes R&D can be defined as:

  • Seeking an advance in science OR technology, such as in overall knowledge or capability.
  • Activities undertaken which aim to achieve the advance by resolving scientific OR technological uncertainties.

Additionally, these activities do not have to be successful.

You can claim SME R&D relief if you're a SME with:

  • less than 500 staff
  • a turnover of under €100m or a balance sheet total under €86m

Any company can claim Research and Development Expenditure Credit (RDEC) for working on R&D projects.

It can also be claimed by SMEs and large companies who have been subcontracted to do R&D work by a large company.

There is only have a two year window to make a claim and companies could be in a position to reclaim some tax that has already been paid.

For further information take a look at the HMRC website and video links, or contact me at Swift and I can put you in touch with our accountancy contacts who are experts in this field: