To be eligible for R&D tax credits, your company must be a limited company in the UK subject to Corporation Tax. The business also must have conducted research and invested money on innovation and development activities. The UK Government’s website defines what project qualifies for R&D tax relief: the project must relate to a company’s trade; and the project’s main goal is to contribute to the development of science or technology.
If you’re an SME with less than 500 staff and a turnover of less than €100m or a balance sheet under €86m, you qualify for SME R&D Relief. You are allowed to deduct a total of 230% (130% from qualifying costs plus the normal 100% deduction) from your yearly profit. You can also claim a tax credit amounting up to 14.5% of the surrenderable loss if your company is making loss.
According to www.sas-accountants.com, the average saving from R&D Tax Credits generated by SMEs in the UK amounted to £61,514. A lot of companies are still unaware that they are able to receive R&D Tax Credits, which is why if you think your SME is eligible to get this tax incentive, talk to one SAS accounting professional now.