Spent money developing a new product or service? You could be eligible to claim back up to 33% of your research and development spend from HMRC.<\/p>\n
Estimate your R&D tax credit claim and see how much you could get back under the SME scheme.<\/p>\n","button":{"link":"","type":"text-link","images":false},"button_2":{"link":null,"type":false,"images":false},"form":{"type":"none","hubspot_form":{"layout":"newsletter","hide_founderinvestor_toggle":false,"default_community":"founder","custom_form_id":"","gdpr_disclaimer":"By subscribing, you agree to receive information from SeedLegals. You can unsubscribe anytime. View our privacy policy<\/a>"},"custom":{"embed":""},"gtm_form_type":false,"gtm_form_location":false},"options":{"section_classname":"","max_width":"max-w-4xl","section_alignment":"left","text_alignment":"left","heading_tag":"h2","heading_font_size":"match_heading_tag","heading_max_width":"w-full","heading_classname":"","content_font_size":"default","content_font_weight":"default","content_max_width":"w-full","content_classname":""}},"ebook_hero":{"subheading":"","heading":"","content":"","button":{"link":null,"type":false,"images":false},"link":null,"type":false,"options":{"section_classname":"","max_width":"max-w-4xl","section_alignment":"left","text_alignment":"left","heading_tag":"h2","heading_font_size":"match_heading_tag","heading_max_width":"w-full","heading_classname":"","content_font_size":"default","content_font_weight":"default","content_max_width":"w-full","content_classname":""},"form":{"hubspot_form_id":"","gdpr_disclaimer":"By providing us with your email address, we will keep you up to date with our latest news and offers, as detailed in our privacy policy<\/a>. You can unsubscribe at any time.","submit_button_text":"Sign up"},"logos":{"heading":"In collaboration with","logos":false},"graphic":{"image":false,"image_max_width":"350px","hide_embellishments":false,"offset":false,"offset_color":""}},"homepage_hero":{"heading":"","content":"","links":false,"ab_test":false,"stats":false,"show_trustpilot_widget":false,"remove_header_height":false},"homepage_hero_type_selector":{"pre_heading":"I am","items":false},"old_homepage_hero":{"hero":{"alt_hero":false,"heading":"","alt_heading":"Say hello to","rotate_words":false,"content":"","button_1":null,"button_2":null,"products_heading":"","products":false}},"two_column_media_offscreen":{"subheading":"","heading":"","content":"","button":{"link":null,"type":false,"images":false},"button_2":{"link":null,"type":false,"images":false},"form":{"type":"none","hubspot_form":{"layout":"newsletter","hide_founderinvestor_toggle":false,"default_community":"founder","custom_form_id":"","gdpr_disclaimer":"By subscribing, you agree to receive information from SeedLegals. You can unsubscribe anytime. View our privacy policy<\/a>"},"custom":{"embed":""},"gtm_form_type":false,"gtm_form_location":false},"options":{"section_classname":"","max_width":"max-w-4xl","section_alignment":"left","text_alignment":"left","heading_tag":"h2","heading_font_size":"match_heading_tag","heading_max_width":"w-full","heading_classname":"","content_font_size":"default","content_font_weight":"default","content_max_width":"w-full","content_classname":""},"logo_graphic":false,"hide_trustpilot_widget":false,"disclaimer":"","media":{"media_type":"image","image":false,"videos":false}},"pricing_hero":{"heading":"","content":""}},"content":[{"acf_fc_layout":"rd_calculator","_acfe_flexible_layout_title":null,"_acfe_flexible_toggle":null},{"acf_fc_layout":"1_column_text","_acfe_flexible_layout_title":null,"_acfe_flexible_toggle":null,"subheading":"","heading":"Can my startup claim R&D tax credits?","content":" Many companies don\u2019t realise they\u2019re spending money on activities that qualify for R&D tax relief. That means they miss out on a cash boost or a reduction in their tax bill.<\/p>\n If you\u2019ve invested time and resources into developing a new product or service – or even tried to improve something that already exists – you could be eligible to claim back up to 33% of your R&D spend from HMRC under the SME scheme. Larger companies can claim under the RDEC<\/a> scheme.<\/p>\n As an SME, the type and amount of R&D tax relief you can claim depends on how much you\u2019ve spent, what you\u2019ve spent it on and whether your company is making a profit or not.<\/p>\n You could claim up to 33% of your R&D spend<\/strong> as a direct cash payment.<\/p>\n You could reduce your Corporation Tax bill by around 25% of your R&D expenditure<\/strong>. Or receive a refund for overpaid tax.<\/p>\n Simply enter the rough figures for your expenses into our R&D SME tax credit calculator to see what you could claim.<\/p>\n","button":{"link":"","type":"text-link","images":false},"button_2":{"link":null,"type":false,"images":false},"form":{"type":"none","hubspot_form":{"layout":"newsletter","hide_founderinvestor_toggle":false,"default_community":"founder","custom_form_id":"","gdpr_disclaimer":"By subscribing, you agree to receive information from SeedLegals. You can unsubscribe anytime. View our privacy policy<\/a>"},"custom":{"embed":""},"gtm_form_type":false,"gtm_form_location":false},"options":{"section_classname":"","max_width":"max-w-4xl","section_alignment":"left","text_alignment":"left","heading_tag":"h2","heading_font_size":"match_heading_tag","heading_max_width":"w-full","heading_classname":"","content_font_size":"default","content_font_weight":"default","content_max_width":"w-full","content_classname":""}},{"acf_fc_layout":"two_column_content","_acfe_flexible_layout_title":null,"_acfe_flexible_toggle":null,"two_column_content":{"":null,"section_title":"","heading":"We're here to |help|","content":"Not sure if your project counts as R&D or which costs you can claim for? Our team of R&D experts is standing by to help. Book a time to talk through your claim and get your questions answered.","link":"","graphic":31625,"use_form":false,"form":{"form":{"type":"none","hubspot_form":{"layout":"newsletter","hide_founderinvestor_toggle":false,"default_community":"founder","custom_form_id":"","gdpr_disclaimer":"By subscribing, you agree to receive information from SeedLegals. You can unsubscribe anytime. View our privacy policy<\/a>"},"custom":{"embed":""},"gtm_form_type":false,"gtm_form_location":false}},"background_color":false,"visibility":true,"shapes":"none","shape_position":"top-left","reverse_content":true,"dark":true,"remove_padding_top":false,"remove_padding_bottom":true,"show_bullet_points":true,"show_blocks":false,"bullets":[{"bullet":"Talk to us your way - chat, phone, email, video call"},{"bullet":"Get unlimited help - no billable hours, no extra cost"},{"bullet":"Ask us anything - we're here 9am til 6pm Mon - Fri"}],"blocks":false}},{"acf_fc_layout":"homepage_three_column_stats","_acfe_flexible_layout_title":null,"_acfe_flexible_toggle":null,"layout":"default","benefits":{"blocks":[{"icon":false,"heading":"98%","content":"success rate"},{"icon":false,"heading":"\u00a342k ","content":"claimed on average"},{"icon":false,"heading":"Unlimited","content":"expert help"}]},"remove_margin_top":false},{"acf_fc_layout":"faqs","_acfe_flexible_layout_title":null,"_acfe_flexible_toggle":null,"faqs":{"":null,"heading":"What else do I need to know about my R&D tax credit calculation?","content":"","button":"","button_2":null,"blocks":[{"question":"How do R&D tax credits work?","answer":"R&D tax credits are a form of tax relief designed to boost innovation in the UK. They encourage companies to spend money on developing new products and services. Spent money developing a new product or service? You could be eligible to claim back up to 33% of your research and development spend from HMRC.<\/p>\nIf you\u2019re loss-making<\/h4>\n
If you\u2019re profit-making<\/h4>\n
\r\n
\r\nIf you meet the qualifying criteria, you can claim back a percentage of the amount you\u2019ve spent on R&D activities. If your claim is successful, you\u2019ll either get cash, a reduction in your tax bill or a refund on overpaid tax.
\r\n
\r\nThere are two R&D schemes: one for smaller companies with under 500 employees (SME) and one for larger companies (RDEC).
\r\n
\r\nOur R&D tax credit calculator estimates the tax relief you can claim under the SME scheme. This is the scheme that covers most startups, and it offers a higher rate of tax relief.
\r\n
\r\nGo to our ultimate guide to R&D tax credits<\/a> to find out more about the differences between the SME and RDEC schemes.
\r\n"},{"question":"Is R&D tax credit worth it?","answer":"Yes! R&D tax credits are often overlooked as a source of cash flow for businesses. They\u2019re a helpful way to get extra value from money you\u2019ve already spent - whether it comes as cash or a reduction in your tax bill. And best of all, you can claim even if your project wasn\u2019t successful.
\r\n
\r\nWe know that the process and calculations involved can seem overwhelming and complicated. When you build your R&D tax credits claim<\/a> on SeedLegals, we\u2019ll do all the heavy lifting. Just answer a few questions, import your costs and we\u2019ll do the rest. "},{"question":"What are the R&D tax credit rates?","answer":"This depends on the size of your company and whether you\u2019re profitable or not.
\r\n
\r\nSmall and medium-sized businesses (under 500 employees) that are making a loss can claim back up to 33% of their R&D spend. Claims for profitable SMEs will typically be around 25% of total R&D spend.
\r\n
\r\nLarger companies can claim just over 10% of their R&D spend under the RDEC scheme.
\r\n"},{"question":"How do I calculate R&D tax credits?","answer":"You can see full R&D tax credit calculation examples in the how to calculate R&D tax credit<\/a> section of our ultimate guide.
\r\n
\r\nHere\u2019s a quick summary for a hypothetical loss-making SME called LeedSegals. LeedSegals have recently spent \u00a3100,000<\/strong> on software development.
\r\n
\r\nFirst, LeedSegals needs to calculate their enhanced expenditure figure. All companies can deduct 100% of eligible R&D costs from their tax liabilities. But companies that qualify for the SME scheme get an additional 130% \u2013 this is called the \u2018uplift\u2019.
\r\n
\r\nWhen they add this 130% uplift to the default 100%, they get the enhanced expenditure amount of 230%. They multiply their eligible R&D expenditure of \u00a3100,000 by 230% to get \u00a3230,000. This is the figure on which the value of their R&D payable tax credits will be calculated.
\r\n
\r\nBecause LeedSegals is loss-making, they have to decide whether to surrender the loss for immediate cash credit or carry it forward to offset a future tax bill in a profitable period. They choose to surrender, and multiply their enhanced expenditure figure of \u00a3230,000 by the surrender rate of 14.5% to get \u00a333,350.
\r\n
\r\nResult:<\/strong> LeedSegals claims \u00a333,350 in cash credit<\/strong> - 33% of their R&D spend."},{"question":"How and when can I claim R&D tax credits?","answer":"To claim R&D tax relief, you need to file an R&D claim<\/a> with HMRC detailing the amount you\u2019ve spent on R&D projects. You\u2019ll submit this claim at the same time as you file your Corporation Tax return.
\r\n
\r\nYou can also claim R&D tax relief for the previous two accounting periods by submitting an amended tax return. For example, if your accounting year end is 31 December 2022, you have until 31 December 2024 to submit your claim.
\r\n"},{"question":"What counts as an R&D project?","answer":"To qualify for R&D tax relief, you don\u2019t have to invent a brand new product or process. Most of the claims that we see involve an \u2018appreciable\u2019 improvement to existing technology. You need to demonstrate that this improvement was not straightforward and that you faced 'technological uncertainty' trying to achieve it.
\r\n
\r\nTo pass HMRC\u2019s bar for a qualifying R&D project, you\u2019ll need to show that:
\r\n
\r\n
\r\n
\r\n
\r\n<\/ul>
\r\nFind out more in our guide to R&D eligibility criteria<\/a>. "},{"question":"What expenses qualify for R&D tax credits?","answer":"For full details, see this list of qualifying expenses<\/a> in our ultimate guide to R&D.
\r\n
\r\nIn general, you can claim for:
\r\n
\r\nStaff costs<\/strong>
\r\n
\r\n
\r\n
\r\n
\r\n
\r\n
\r\n<\/ul>
\r\nSubcontractor and third party costs<\/strong>
\r\n
\r\n
\r\n
\r\n<\/ul>
\r\nConsumable items<\/strong>
\r\n
\r\n
\r\n
\r\n<\/ul>
\r\nSoftware costs<\/strong>
\r\n
\r\n
\r\n<\/ul>
\r\nIt can be difficult to separate qualifying costs from non-qualifying costs. If you use SeedLegals to build your R&D claim<\/a>, we\u2019ll go over all your costs with you and make sure your claim is accurate."}]}}],"ctas":{"hide_default_benefits_block":true,"hide_default_customers_testimonial":true,"hide_default_two_col_cta":true},"show_extra_footer_content":true,"landing_page_footer":"standard","has_translated_links":false,"events_hero":{"subheading":"","heading":"R&D tax credit calculator<\/h1>","content":"