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Does your work qualify as R&D?

Author

Andy Wood

Andy is a practical, creative tax adviser who assists a variety of clients in achieving their personal and commercial objectives in the most tax efficient manner.

  • For the R&D tax credits to be available, in addition to meeting the SME criteria, your business will also need to:
  • FIRSTLY – be undertaking qualifying R&D activities.
  • SECONDLY – Have spent on R&D activities.
  • For the purposes of the scheme, R&D is a project which seeks to achieve an advance in overall knowledge or capability in science or technology through the resolution of scientific or technological uncertainty.
  • Innovation can apply to any sector where technical progress can be shown. This could involve development of anything from software through to business processes.
  • The burden is on your company to evidence ‘innovation’. However, the rules do not require you to evidence you have been successful in your R&D or to divulge how you are carrying out your activity. What is sought is the attempt at innovation against technical uncertainty.
  • Innovation of course means different things to different sectors. There is no bright-line test as to what innovation is.
  • Experience of the R&D tax credit scheme and what is likely to be accepted as innovation will be invaluable when assessing your eligibility under the scheme.
  • It becomes a matter of understanding HMRC’s stance on what is classed as ‘innovation’, and effectively documenting and presenting evidence to support your claim.
  • At ETC Tax we are experienced in handling client’s claims from start to finish. Get in touch if you have any queries.

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