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Simplifying R&D claims for small firms

By Iain Rankin, October 2020

Iain Rankin looks at changes in HMRC’s new simplified claims procedure for research and development, and how small firms may benefit. 

Prior to February 2019, making research and development (R&D) claims was something of a minefield for small firms. Some claims were submitted with no more than a single figure included in the tax computation, representing the total qualifying R&D expenditure, while others contained extremely detailed information about the individual projects undertaken and the costs to justify the claim. 

Simply, there existed no clear definition of what constitutes R&D in tax legislation, nor guidance on the precise nature of information that should be disclosed when making an R&D claim. 

Consequently, take up for R&D claims was surprisingly low. It is estimated that less than 5% of potentially qualifying firms were taking advantage of

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