How far back can you claim R&D tax credits?
R&D Tax Credits are government-backed incentives for innovative businesses with the relief often worth around a quarter of qualifying spend on R&D.
A company can make a claim for R&D tax credit relief for any accounting periods ending in the past two years (24 months). Before this period ends you must submit an (R&D) tax credit claim for any qualifying expenditure that you’ve identified during that period.
As an example, the 24-month deadline could look like this if you had a 31 March year end.
- Your accounting period ends on 31 March each year and you should submit your company's corporation tax return within 12 months of this date.
- You have until 31 March 2023 to make a claim for your accounting period ended 31 March 2021.
- The actual deadline is midnight on 31 March 2023.
- After that, it won’t be possible to claim tax relief on R&D qualifying expenditure incurred between 1 April 2020 and 31 March 2021.
What if I’ve already filed my Corporation Tax Return or Previously Made an R&D tax claim?
The same deadlines apply for amendments to previous claims – which can be changed up to 24 months after the end of the accounting period where the R&D took place.
When a new client signs up with Zest, one of the first things we do is look back at their previous two years of accounts and improve any existing claims. On average, we have increased tax credit claims by 110% because we know how and where to find the potential of your R&D tax claim.
What type of work would qualify for R&D tax credits?
Any activity where your business has done work to try and improve the knowledge in your field could qualify for R&D tax credits. That could be improving a product you sell, designing new software, or testing new business processes to better understand your industry. If you have spent on any of the following groups of costs they will be eligible for R&D tax credits:
- Staffing Costs
- Subcontractors
- Externally provided workers
- Software
- Consumables (materials and utilities)
Can Your Business Benefit from R&D Tax Credits?
Identifying qualifying R&D activities for the R&D tax credit can be challenging for both large and small businesses. Schedule a free consultation with our team of experts to learn more. We’ll discuss R&D tax credits and help you determine if our services are a fit for your company.
Other news stories
R&D tax relief changes – everything you need to know for 2023
Find out how how companies can meet the deadlines for R&D tax credit claims and all the key R&D tax relief changes coming into place in 2023.
Is R&D tax deductible?
Costs involved in R&D are tax deductible and there are two ways in which R&D costs can reduce a companies Corporation Tax liability. Firstly – with the usual deduction of 100% of the cost from your companies profits. In addition, the R&D Tax Credit scheme allows a further deduction of 130% of eligible R&D costs, […]
Autumn Statement 2022: What it means for R&D in Your Business
Chancellor Jeremy Hunt has announced a series of changes to the UK research and development (R&D) tax relief regime, including a cut to the deduction and credit rates for the SME scheme, the R&D tax credit. The rate of the large company scheme, the R&D expenditure credit (RDEC) will be increased from 13% to 20%, […]
