Can you Claim SME R&D tax credits?
R&D tax credits provide a valuable cash boost for companies that successfully claim them for their research and development efforts.
Smaller businesses, in particular, can benefit from this financial support, with those applying through the SME scheme receiving a higher rate than those on the RDEC scheme.
The tax relief gained can be reinvested into the business—whether to fund further R&D innovation or upgrade company facilities with new machinery or equipment.
To estimate your potential claim, please contact us.
How is the R&D SME Scheme Changing in 2024?
From 1 April 2024, the SME and RDEC schemes will merge for accounting periods starting on or after this date, bringing significant changes to R&D tax credit claims.
Key updates include:
Introducing the SME Intensive Scheme
From 1 April 2024, the SME and RDEC schemes will merge, establishing a single 20% rate and a unified set of rules. However, loss-making SMEs classified as R&D intensive—those spending over 30% of their total expenditure on research and development—will benefit from an enhanced 27% R&D tax credit.
Previously, the threshold for R&D-intensive classification was 40% of total expenditure, but this has been lowered to 30% as of April 2024.
Is Your Business Eligible for the SME R&D Tax Relief Scheme?
To qualify for SME R&D tax credits, your business must:
Linked and partner enterprises are factored into these totals and can impact your SME status. Eligibility is also influenced by the voting rights your business holds in other enterprises, as well as external voting rights in your company.
What Can Be Claimed as R&D Tax Credits for SMEs?
Under the SME R&D scheme, small businesses can claim Corporation Tax relief on projects that meet the government’s definition of research and development.
Projects may qualify for SME R&D tax credits if they meet the following criteria:
How Do I Claim SME R&D Tax Credits?
SMEs can claim R&D tax credits by submitting a Company Tax Return via GOV.UK. Claims can be made for up to two years after the end of the accounting period in which the R&D expenses were incurred.
While the process can be complex, randd has a team of specialist consultants who can maximize your claim and simplify the submission process.
What Can’t Be Claimed as SME R&D Tax Credits?
Although R&D tax credits cover a wide range of activities—many of which business owners may not initially recognize—there are some exclusions.
R&D tax relief does not cover:
What Can Be Claimed as SME R&D Tax Credits?
Under the SME R&D scheme, small businesses can claim Corporation Tax relief on projects that align with the government’s definition of research and development.
To qualify for SME R&D tax credits, a project must:
