Back

Ask the Experts at Jumpstart

Top tips on myth busting in R&D

9th September 2019, 2:39 pm

Jumpstart is an independent science and technology company focused on helping companies secure innovation funding through HMRC’s R&D tax scheme. We believe that companies get the best results by using people who actually understand the science of what they do, so please see below 9 of our top myth busting tips that will hopefully help you successfully claim through your business.

1: You can only claim for your current financial year…

= MYTH!

  • You can make a retrospective claim up to 2 years from your current EoY
  • Move on this right now so you don’t lose a year’s worth of benefit!

2: Receiving a grant is a death knell for a claim…

= MYTH!

  • Some grants can complicate an R&D tax relief claim, but still be eligible
  • Some place into RDEC Scheme, 9.7% net (not bad for spending someone else’s money!)
  • Some grants allow relief on your company’s own expenditure through the SME scheme

3: If you are subcontracting the R&D out, you can claim 100% of the cost:

MYTH!

  • SMEs can only claim relief on 65% of the cost NOT 100%
  • Large companies cannot claim for subcontractors costs

4: You can’t claim if you are the subcontractor doing R&D for another company.…

MYTH!

Complex area  – real acid test would be:

  • Who is responsible for identifying and resolving technical uncertainties?

– If it’s you, you are eligible

OR

  • Who bears the financial risk?

– If it’s you, you are eligible

Tip: Be clear in your contract!

5:   My company meets criteria for an SME, so we can claim through that scheme!

MYTH!

Be careful:

  • If your company is majority owned by an investor whose collective portfolio adds up to a large company, have to claim under RDEC

6:   Routine testing doesn’t qualify for relief!

MYTH!

It does IF the routine testing is required to:

  • confirm a particular uncertainty has been resolved within the project

OR

  • validate that an advance has been realised

7: You can claim relief on any costs associated with an R&D project!

MYTH!

Many advisers will take a relaxed view, but outside HMRC guidelines:

  • Professional fees (accountants, lawyers, consultants unless they are undertaking subcontract R&D activity)
  • Market research
  • Attendance at conference
  • Foreign travel
  • Investment in your business infrastructure

8: You can only claim for successful projects

Good news! It’s a MYTH!

  • You can claim R&D tax relief for ANY eligible R&D activity whether there is a successful outcome or not.
  • Projects with greater levels of technical challenge/uncertainty are more likely to fail, so should be rewarded.

Next Article

Top tips on blogging for business

Jumpstart is an independent science and technology company focused on helping companies secure innovation funding through HMRC’s R&D tax scheme. […]

Read Article