SME R&D tax relief and credits scheme

What is SME R&D tax relief?

With the SME scheme you can claim tax relief up to 33% on your qualifying R&D expenditure. You are classed as a small or medium sized enterprise (SME): for the purposes of R&D tax incentives if you employ less than 500 employees and have either an annual turnover under €100 million or a balance sheet under €86 million.

Do you think you could be eligible?

Ask yourself:

  • Do you design and make new products?
  • Do you seek to improve processes, services, materials or devices?
  • Do you make prototypes or perform testing?
  • Do you develop software or IT solutions?
  • Have you invested in failed projects or developed products that are never launched?
  • Do you employ any staff with a technical or scientific background?
HMRC have projected over 81,500 SME claims for 2019-20*
The average claim under the SME scheme projected for 2019-20 is over £58k*

HMRC statistics 2021

read more

How GovGrant can help you claim an SME R&D tax credit?

It takes an experienced eye to identify the full potential of your claim. We will give you an expert who knows about your industry and speaks your language. They walk the floors and get to know your business so that they can identify what you do to develop and innovate your products or services.

It is then a question of preparing the claim. We know what HMRC is looking for, so we can ensure your claim is maximised and robust – which gives you the best chance of having your claim approved.

We manage your claim from start to finish – scoping, registering the claim, handling queries from HMRC, and handling the accounting treatment.

We work with you to make the claims process as seamless as possible – simply put, we will do the work and you will get the benefit.

To start with you need to be a UK limited company and subject to UK corporation tax to qualify for the SME scheme. A company does not have to be paying corporation tax it can be in a loss position and still make a claim.
You are classed as a small or medium sized enterprise (SME) if you, and your connected companies, employ fewer than 500 employees with either an annual turnover under €100 million or a balance sheet under €86 million.

You cannot claim SME tax relief on a project if:

  • Your R&D is subsidised
  • You have applied for, or are receiving, State Aid for your R&D projects
  • You are subcontracted by a larger company
  • You are no longer a “Going Concern”

In these cases you may be able to claim under the RDEC scheme. Talk to us to find out more.

If your company has been undertaking qualifying R&D and has not yet claimed R&D relief, you may make a claim for a tax return period that has already been filed with HMRC, as long as it is within two years after the end of the accounting period. Bear in mind that the accounting period isn’t necessarily the same as the tax return date.

We will do the heavy lifting to put your claim together.

The technical and financial reports explain how your project:

  • Looked for an advance in science or technology and aimed to achieve this advance
  • Had to overcome scientific or technological uncertainty
  • Could not easily be worked out by a professional in the field

From 1 April 2021, HMRC introduced a cap on the amount of R&D tax credit that will be paid to a loss making SME. The R&D tax credit will be capped at £20,000 plus three times the total PAYE and NIC liability of the company for the year. A company making a claim for a payable R&D tax credit of less than £20,000 will not be impacted by the cap.

And even if you’ve made a claim already

We maximise claims through an expert led, detailed assessment of your activities. There is usually a very good chance we will improve them.

On average, we have increased existing claims by 200%, because we know how to find the full potential of your claim.

Find out more about how we could help you increase your claim.

Increase existing claims by 200% on average

Ensure your business recognises and receives the full credit it is due with GovGrant’s IP services

The Patent Box is closely linked with R&D tax relief and a company can often claim tax relief under both schemes.

GovGrant can offer you advice to maximise your claims across both schemes. Find out more about our IP services including Patent Box.