{"id":993,"date":"2019-09-12T08:54:01","date_gmt":"2019-09-12T08:54:01","guid":{"rendered":"https:\/\/swoopfunding.com\/au\/?p=993"},"modified":"2024-06-13T14:49:53","modified_gmt":"2024-06-13T14:49:53","slug":"rd-tax-credits-simply-explained-by-swoop","status":"publish","type":"blog","link":"https:\/\/swoopfunding.com\/au\/blog\/rd-tax-credits-simply-explained-by-swoop\/","title":{"rendered":"R&D tax credits simply explained by Swoop"},"content":{"rendered":"\n

If your business is investing in a project which is seeking to achieve an advance in science or technology, you could well be entitled to some generous tax credits. These tax credits include investment into technology and IT systems, so it is worth a conversation with our experts at\u00a0swoopfunding.com.au<\/a><\/strong> to find out whether you\u2019ll qualify.<\/p>\n\n\n\n

R&D tax credits for small businesses<\/strong><\/p>\n\n\n\n

R&D tax credits are a tax incentive from the UK government, designed to encourage companies to invest in research and development. The scheme was introduced in 2000 and only Limited Companies qualify for R&D tax relief. This scheme can dramatically reduce your tax bill, or you can claim payable cash credits as a proportion of your R&D expenditure.<\/p>\n\n\n\n

Claims must be submitted no later than two years after the end of the year in which the money was spent. Two-thirds of the total amount claimed until now has come from companies registered in London, the South East or the East of England. However, R&D tax credits are available to small businesses all over UK and Ireland.<\/p>\n\n\n\n

There are different types of R&D relief depending on the size of your company and whether the qualifying project has been subcontracted to you or not.<\/p>\n\n\n\n

Small and Medium-sized Enterprises (SME) R&D Relief<\/strong><\/p>\n\n\n\n

Small business R&D tax relief, or the SME tax credit scheme, is accessible if you are a SME with fewer than 500 staff and a revenue of under \u20ac100m or a balance sheet total under \u20ac86m. The SME R&D tax credit scheme has a more generous rate of tax credit \u2013 up to 33p for every \u00a31 spent on R&D.<\/p>\n\n\n\n

Research and Development Expenditure Credit<\/strong><\/p>\n\n\n\n

This replaces the relief previously available under the large company scheme. Large companies can claim a Research and Development Expenditure Credit (RDEC) for working on R&D projects.<\/p>\n\n\n\n

This can also be claimed by SMEs and large companies who\u2019ve been subcontracted to carry out R&D work by a large company. The RDEC is a tax credit for 12% of your qualifying R&D expenditure.<\/p>\n\n\n\n

Is my small business eligible for R&D tax credit?<\/strong><\/p>\n\n\n\n

Your business must be able to demonstrate to HMRC that the product or service you\u2019re claiming for is truly innovative and an advance on what\u2019s currently available in the market. According to HMRC, R&D for tax purposes is a project which \u201cseeks to achieve an advance in science or technology\u201d. R&D is still deemed to have taken place whether or not the project goes on to be successful; it\u2019s the attempt that counts.<\/p>\n\n\n\n

You must be able to explain how a project:<\/p>\n\n\n\n