This is an essential guide for anyone who’s looking to claim R&D tax credits in 2020.

1. R&D Tax Credits
.Essential Guide (2020)

2. What are they?
Research and Development (R&D) tax credits
government incentive run and administered
by HMRC.
● Around £4.3bn of R&D tax relief was in
total given to companies for the year.
● 90% of UK eligible companies don't
claim.
● £54,196 is on average claimed by
innovative companies.

3. How do they work?
● S

4. R&D Tax Credit Statistics
2020 R&D Tax Relief Rates:
● SME – 130% Enhancement Rate
● SME – 14.5% Payable Credit
● RDEC – 13% of Qualifying Expenditure
● Corporation Tax – 19%

5. Who is eligible?
● Developed or prototyped a new
product or device;
● Developed or improved software;
● Spent money on R&D project;
● Be a qualifying UK based company;
● Be subject to Corporation Tax;

6. Which costs qualify?
What CAN be claimed for:
● Utilities (Gas, water)
● Salaries
● Wages
● Consumable item
● Prototypes
● Subcontractors
● Software
● Pension fund
What CANNOT be claimed for:
● Rent
● Travel expenses
● Dividends
● Recruitment
● Production and distribution
● Capital expenditure*
● Cost of land
● Patent and trademarks

7. Schemes
SME Scheme:
In addition to normal 100% deduction,
SMEs can deduct an extra 130% of their
qualifying costs from yearly profit which
adds up to a total of 230%.
RDEC Scheme:
Scheme offers less generous benefit
than SME, paying 11% of their eligible
R&D expenditure as cash payment.

8. Calculation Example
Calculating Savings
SME Example
Profit/(Loss) before claim £50,000
R&D qualifying spend £250,000
R&D enhanced deduction £325,000
Profit/(Loss) after claim (£275,000)
Corporation tax saved £9,500
Potential payable tax credit £39,875
Potential payment from HMRC £49,375
Online R&D Tax Credits Calculator >

9. Case Study Example
SME Construction Company Claims
£257k in R&D Tax Credits
A Nottinghamshire-based construction client
and their accountants did not consider their
work to be eligible R&D.
When we visited their head office and
reviewed their work we cleared some
misconceptions, confirmed that they were
eligible and successfully secured corporation
tax savings of £257,622.

10. How to claim R&D tax credits?
Making the actual claim can be a complex
process, which is why R&D tax consultants
like us are here to help you. Our process is
simple:
1. Initial call
2. Building an application
3. Submission to HMRC
4. Receive benefit
We’ve been successfully claiming for our
clients for 11 years and have a 100% success
rate.
Claiming R&D Tax Credits >

11. Free essential guide to R&D tax credits:
www.g2innovation.co.uk/rd-tax-credits-guide
We’re happy to provide advice on a no obligation
basis. Get in touch today to find out if you’re eligible,
info@g2innovation.co.uk or call us on 0115 824 0402
Thank You