Research and Development Tax Reliefs and COVID-19

03 April 2020

R&D is at the fore in these difficult times – whether this be the hunt for a COVID-19 vaccine, repurposing machinery to develop breathing apparatus or making alcohol for hand sanitisers.

However, even if your company isn’t directly pursuing one of these goals, it is almost certainly worth revisiting your ‘research and development’ position at this time to see if you can access or increase your Research and Development tax credits. 

These are cash generative reliefs available to companies in all sectors who are pushing the boundaries in their area, seeking improvements in their production or manufacturing processes or working on complex software development projects even where these projects are non-client facing. It doesn’t matter if someone else has achieved the same end goal or if the project fails; it is however key that you are seeking to achieve an advance beyond the current publically available state of the art. 

Existing claimants of R&D tax relief may also wish to look at their own position: 

•    Is it possible to bring forward preparation of your R&D claim to improve your cash flow benefit?

•    Should engineering personnel who are working on stalled client projects be redirected to internal development projects to maintain their R&D percentages?

•    Is now the time to review existing claims for possible additional expenditure? For example, have you fully accounted for individuals performing supporting activities that are integral to the R&D or overseas branches or entities who recharge their costs to the UK? 

These are just a few ideas and there are many more that could be considered. 

If any of these points resonate with you please speak to your normal BDO contact.  

View our COVID-19 hub