R&D Tax

Background to the scheme

Eligibility

Defined as activities where there is technical uncertainty and scientific advancement

Eligible costs are typically salaries, contractors, software, hardware and utility costs.

Claim process

R&D tax credits are claimed as part of CT600 (Corporation Tax Return). Usually annual accounts and corporation tax returns are submitted together.

The additional information to provide HMRC is;

Technical narrative of the projects

Breakdown and calculation of the relief

Resources

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Claiming Research and Development tax reliefs⁠

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Getting help

Our view on the market for R&D services

Our experience is that the market for R&D services has become both crowded and commoditised over the past years. Boutique agencies are using the same checklists behind the scenes, many of which are available to accounting firms or businesses commercially.

In spite of this, however, many firms and freelancers are still using the lack of transparency to charge more than they should. We are highly sceptical of any provider charging large fees as a percentage of the total amount claimed.

We believe that businesses with a history of successful claims and good documentation are much better served by a flexible solution tied to expert time spent.

Where to go for help

Broadly startups have four choices. We have outlined our perception of the pros and cons of each below.

Disclosure: authors of this document work at Quantico.

R&D providers

R&D providers

Choice

How it works

Pros

Cons

DIY

If you have the time to invest there is nothing to prevent you from filing the claim yourself.

More economical use of developer time

Reduced professional fees

Time / expertise may not be available in house

Accounting firms

The majority of traditional accounting firms will now process R&D claims for a fixed fee.

An easy option where you already have a good relationship with a trusted provider who knows your business

Some firms may have limited experience processing claims for startups

Boutique agencies or freelancer

Boutique agencies usually specialise in grant applications. They typically charge a % success fee.

Shares risk for particularly aggressive or complex claims

Will consume time getting up to speed on business, financials and interviewing developers

Quantico

Based on in-house finance team model. We provide specialists for the number of days required. Typically 1-2 days Finance Business Partner and 0.5 day tax review.

No information transfer required for businesses already using Quantico finance team

Usually more cost effective than % fee

Will consume time getting up speed when not existing Quantico client

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