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What is R&D Tax Refund Claim?
Research and Development (R&D) Tax Refund, also known as R&D Tax Credits, is a UK government initiative designed to incentivize innovation and technological advancements among businesses operating within the country. By offering tax relief or refunds, the scheme encourages companies to invest in R&D projects that lead to the development of new products, processes, or services, or to enhance existing ones.
Companies eligible for R&D tax credits can either reduce their tax bill or claim payable cash credits as a percentage of their R&D expenditure. The claim process involves identifying qualifying R&D projects, calculating the associated costs, and submitting a claim to HM Revenue & Customs (HMRC).
The UK has two schemes for R&D Tax Credits: the Small or Medium-sized Enterprise (SME) Scheme and the Research and Development Expenditure Credit (RDEC) Scheme for larger companies. Both schemes provide substantial financial support, yet they have different rates and eligibility criteria. Engaging a professional accountancy service for R&D Tax Refund Claim can help businesses navigate the complex tax laws and ensure a successful claim, thus aiding in easing the financial burden and promoting innovation.
