R&D Tax Relief Eligibility Quiz

You can claim R&D Tax Credits up to two years after the end of the accounting period in which your eligible development work took place.

However, some companies must file a claim notification form within 6 months of the end of their accounting period if they want to make a claim in the future. 

Read more: What is the Deadline for R&D Tax Claims?

When it comes to R&D Tax Relief, failure is an option. 

HMRC’s definition of qualifying R&D activity says nothing about “success”. In fact, failure can actually help your claim because it demonstrates that you encountered a scientific or technological uncertainty – a key part of the government’s definition of qualifying R&D. 

Even if your project is successful, it’s still important to show HMRC that you faced challenges during your development work.

Some companies think they can’t receive grants and R&D Tax Credits for the same work. Thankfully, this isn’t true.

There are various kinds of grants available, but none of them will prevent your company from claiming R&D Tax Credits.

However, winning a grant could impact how much funding you can claim through the R&D Tax Credits scheme and your eligibility for SME R&D Tax Relief. 

Read more: Grants and R&D Tax Credits – Can I Claim Both?

The new RDEC scheme, also known as the merged scheme, is not a form of government grant. However, it is a type of government funding.

It provides funding the form of an above-the-line credit.

Making a mistake in your claim – even a small one – significantly increases your chances of facing an HMRC enquiry. This is where a tax inspector investigates the accuracy and eligibility of your claim.

Facing an enquiry will delay your relief or cash credit, could lead to your claim size being reduced, and may even result in a hefty fine for your business.

Read more: HMRC R&D Enquiries: What They Are & How to Respond

Sole traders cannot claim R&D Tax Credits. 

R&D Tax Credits are only open to businesses that are liable for UK corporation tax. Sole traders do not pay corporation tax. As a result, they are ineligible for the scheme.

No, universities cannot claim R&D Tax Relief.

Universities and other not-for-profit organisations could claim R&D Tax Credits until 2015. However, the government decided to withdraw their access to this programme to ensure it remained “effective and well-targeted to business Research and Development.”

Charities cannot claim R&D Tax Relief. 

Charities and other not-for-profit organisations were previously able to claim R&D Tax Credits through RDEC. But the government withdrew this facility in 2015 to “ensure that the scheme remains effective and well-targeted to business Research and Development.”

No. LLPs do not qualify for R&D Tax Credits directly. 

R&D Tax Relief is only open to companies that are liable for UK Corporation Tax. As LLPs are exempt from corporation tax, they cannot claim R&D Tax Relief. 

However, LLPs can claim R&D Tax Credits if they are in a partnership with another company that is liable for corporation tax.

R&D Tax Relief has a range of advantages over other forms of research funding. Most notably, it’s open to all industries, not just those on the cutting edge of technology. 

Another advantage: R&D Tax Relief is usually paid out pretty quickly, with HMRC aiming to process 85% of payable claims within 40 days.

Research and Development Tax Relief is likely one of the best ways to fund your innovation, with the only limiting factors being the eligibility criteria, your application’s compliance with HMRC regulations, and your ability to maximise your claim size. That’s where we can help.

GrantTree’s specialists have years of experience building successful, fully compliant claims. We know what works and what doesn’t. 

Most importantly, we take the stress out of applying to the scheme so you can focus on expanding your team, developing new products and services, and reaching new customers.