Research & Development


Research & Development – Tax Credits for SMEs – Money back for investing in innovation

Research and Development (R&D) Tax Credits are Government tax breaks designed to encourage innovation by incentivising companies to invest in R&D, enabling them to reduce their tax bill or claim payable credits on a proportion of their R&D expenditure.

  • 26% Tax Reduction for profitable Companies (25% for expenditure prior to 1 April 2015)
  • 33% Cash Back for loss making companies

R&D Tax Credits - How it works

R&D for tax purposes takes place when a project seeks to achieve an advance in science or technology. Eligibility is not limited to activities taking place in laboratories and science based research centres. R&D tax credits can often be claimed in far broader areas and various enterprises could qualify for significant tax reductions and gain a cash flow boost. Loss making companies can even claim back tax they haven’t paid in the first place.

What's it worth?

  • Up to 26% tax reduction for profitable companies - that’s the equivalent of 26p from HMRC for every £1 spent on R&D activities
  • Up to 33.35% cash back for loss making companies - an increased rate from April 2014

Expenditure includes:

  • Staff costs of those working on a project, subcontractor costs (65% allowable), and certain other overhead expenses.
  • Developing new or improved products, processes, services or systems.

Beavis Morgan - specialists in working with owner-managed businesses and entrepreneurial thinkers

At Beavis Morgan, we have made substantial successful claims for business across a range of sectors.

  • Discussing underlying concept or technology and getting to know your innovation in detail
  • Extracting the relevant financial information to compile robust claims which we present to HMRC
  • Liaising with HMRC on your behalf to assist in the process of achieving R&D money back for you and your business

Below is a sample of examples where we have successfully helped businesses achieve tax breaks for investing in R&D:

Business Project Tax Benefit £
Advertising Agency Technical innovation in digital marketing 113,000
Digital Marketing Innovative technology platform to facilitate project development 24,000
Game Developer Development of 3D action games for mobile and tablet devices and other digital applications 129,000
Marketing  & Communications Digital database used for business development support 58,000
Travel Agency Development of suite of virtual corporate travel tools 161,000
Lighting Products Development of lighting concepts using 3D digital imaging software 26,000
Property Consultancy Project collaboration tool for construction and property portfolio industries 68,000

Our specialist team at Beavis Morgan can help you with all aspects of your R&D tax credit claim, including:

  • Ascertaining whether you are eligible to qualify
  • Identifying and capturing expenditure on qualifying activities
  • Preparing a robust report for submission to HMRC
  • Being prepared for and managing an audit by HMRC

Speak to us today to find out how you can benefit from the R&D tax credits - but remember the 2 year time limit.