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R&D credits aren’t just for the ‘lab coat’ community!

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R&D credits aren’t just for the ‘lab coat’ community!

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The Times recently reported that celebrity chef Sat Bains has successfully claimed R&D tax credits from HM Revenue & Customs (HMRC).

Mr Bains secured the relief because the experimentation and innovation conducted in his development kitchen met HMRC's definition of R&D.

Despite the press coverage’s indication that this is “new news”, R&D tax credits have always been available to any company who pays corporation tax, providing they meet certain criteria. Since the R&D tax credit schemes were launched (2000-01), nearly 85,000 claims have been made and over £8bn of relief has been claimed.

According to HMRC’s R&D Tax Credits Statistic Report of August 2013, more than 24,000 different companies have made claims under the SME (Small and Medium Enterprise) scheme since it began (as well as 6,300 under the large company scheme, which launched in 2002-03).

The HMRC guidelines stipulate that:

An R&D project seeks to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty.

What does this mean for businesses?

It means you may be able to reduce or eliminate your corporation tax bill, or perhaps even reclaim cash from HMRC, if you do something that could be considered research.

Despite the largest claims in 2011-12 stemming from Business Services and Manufacturing, companies in the following industry sectors have also made successful claims:

  • Wholesale & retail, hotels & restaurants
  • Mining & quarrying
  • Financial Intermediation
  • Public Administration & Defence
  • Construction
  • Distribution of Gas, Electricity & Water
  • Transport, Storage & Communication
  • Education, Health & Social Work
  • Agriculture & Fishing

Tax specialist, Melissa Christopher, commented:

“We have been proactively helping clients determine whether they qualify to claim R&D relief for a long time now and continue to highlight that it is a common misconception that R&D is only open to those in lab coats.”

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