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Companies that have not yet considered how their products or services may fall within the definition of Research & Development (R&D) for tax purposes are likely to be missing out on significant tax savings through R&D tax relief.
R&D tax relief rewards companies that are seeking advancement in the state of knowledge in their sector. In the definition for tax purposes1, R&D does not necessarily mean the development of a new product. R&D can involve development of new or improved products, processes, services, devices or materials. Importantly, R&D is not limited to a particular industry. For example, R&D claims can be made in industries such as retail (e.g. improved processes), IT and telecommunications (e.g. software development), food and beverage (e.g. innovative recipes), engineering (e.g. new materials), manufacturing (e.g. automation) as well as the more well-known R&D industries such as pharmaceutical, biotechnology and energy. (more…)
We’ve written a fair amount recently on IPcopy about the UK’s patent box regime and R&D tax credits. However a few weeks ago we were treated at Keltie to a great presentation from Kevin Phillips and Andy Nash from Baker Tilly on both subjects from which I’ve extracted the following points that caught my eye/ear.
A report in Business Matters suggests that around 40% of companies that might be eligible for R&D tax credits do not apply for them. This supposedly equates to an average refund of £35,000 per year (tax free) that is not being claimed. In this article IPcopy takes a brief look at the subject and asks what are R&D tax credits, can I claim them and how do I go about this?