The Voice of SME's in Engineering

R&D Tax Solutions Ltd

R&D Tax Relief is available to all UK LTD companies subject to corporation tax. There are two regimes applicable SME and Large: SME criteria is that the company and associated enterprises has under 500 employees, and less than €100million turnover or less than €86million gross assets. Large companies (also known as RDEC) are all companies that do not meet the SME criteria.

For SMEs the benefit is up to 24.7% cash benefit on qualifying expenses, whereas for loss making SME’s this can be up to 33.35%.  Large companies get an effective benefit of up to 9.7% on qualifying expenses.

To qualify for R&D tax relief your projects must seek to create new or enhanced products, processes, services or systems. This may include updates for customer requirements.

Costs that qualify include staff costs, externally provided workers, software licenses, subcontractors, materials used to build the prototype. Certain intangible assets can also be considered as costs for the purpose of the claim. Capital additions can receive 100% relief as long as these additions are related to an R&D claim.

Here are some case studies which detail the R&D claims for several engineering companies:

Case Study: Economical Engineering and How R&D Tax Relief Saves You Money In this case study, we look at how the government’s tax credits scheme benefited a company that specialises in structural steel services. From the design and erection of structures up to 500 tonnes to site work and welding. In order to run a cost-efficient and economically sound business, engineering sector businesses need to understand not only how to make products that sell, but how to utilise the many tax rules and regulations that govern the industry. Link: https://rndtax.co.uk/wp-content/uploads/2018/04/am_fabrication_case_study.pdf.

Case Study: Conveyor Engineering Prototypes There are many complexities surrounding the continual development of conveyor belts. Engineering can be a detailed and time-consuming industry in which changes take time to be innovated and constructed. This case study outlines our work with several high-quality welding and fabrication solution companies who have become leading UK conveyor manufacturers. Link: https://rndtax.co.uk/wp-content/uploads/2018/04/conveyor_engineering_case_study.pdf.

Contact - Evgeni Vachkov on 0161 298 1010 ext 101 or evgeni@rndtax.co.uk