Frequently Asked Questions

What is eligible expenditure?

For eligible projects/activities, this is the money spent on salaries (including NIC, pension and bonuses), externally provided workers (EPW), sub-contractor, software/hardware, reimbursed expenditure (travel subsistence), utilities (electricity, water, gas and oil) and consumables used in the process, such as chemicals, materials, batteries and certain tools.

My current accountant says I am not eligible for R&D Tax Relief. Is there anything else I can do?

That may be the case, however in addition to being accountants, we have a specialist R&D tax team that have achieved £10m in benefits for our clients and a 100% success record to date. Speak to us to find out more.

How does subcontracting affect an R&D Tax Relief claim?

It is possible for subcontracting companies to claim R&D Tax Relief and a company may claim the relief on their expenditure on subcontractors. In order to make a claim you need to be sure about your contractual situation, the work that subcontracted employees are contracted to do, who is bearing the cost, and the size of your business, as all of these can have an effect on the eligibility of expenditure on subcontracted work.

What percentage of the sub-contractor payments can be claimed?

Under the SME schedule, up to 65% of payments to subcontractors can be claimed. The rules differ if the SME is connected to the subcontractor (e.g. if it is parent, part of the same group or they are under common control).

Does the sub-contractor have to be in the UK?

No, there is no requirement for the subcontractor to be in the UK. However, it is important that the subcontractor is engaged to perform a specific task.

Can I claim for R&D Tax Relief even though I’m loss making?

Yes. The crucial thing is that companies have to be spending money, and the more they have spent on eligible activities, the greater the potential benefit. Loss-making companies are usually eligible to receive a cash repayment.

Does it really result in cash back?

Yes, if you meet the criteria and are making a profit you can obtain a refund of corporation tax that you’ve already paid. If you are making a loss, you can receive a cash payment. However, sometimes companies prefer not to take the cash and take the future tax relief instead.

How much money can I expect to get back?

This depends on your current tax position. If the R&D costs qualify, you should expect up to 33.35% of those costs back for loss-making companies. The tax benefit for profitable companies is up to 26%.

How long does it take?

Typically, around 3 – 6 weeks after we receive the information. However, a recent record was 4 days!

How much will it cost me?

Your initial consultation is free of change. Our fees in any case are contingent on a successful outcome.

Can you work with my accountant?

Yes – we have worked in partnership with many accountants over the years, without disturbing existing relationships. We always complement rather than complete. Contact us to find out how we can work together with your accountant to maximise eligibility and present a report accordingly.

R&D Tax Relief

R&D Tax Relief has provided a major boost to British business, but many are still unaware that they can claim the relief to help fund research and development, often incorrectly thinking that their on-going enhancement of existing products and services does not qualify because “it is just what we do”. Here, some of our clients explain how Beavis Morgan has assisted with their successful R&D Tax Relief claims.

HMRC Legislation

Published 4 October 2017
(The following link directly to the Government website [open in a new tab/window])

R&D tax relief supports companies that work on innovative projects in science and technology.

Video guides