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How to Speed Up Your R&D Tax Credits Claim during Covid-19

Since private funding is set to slow down over the next couple of quarters, Government schemes - such as R&D tax credits - are going to be critical in the coming weeks and months. The average Innovative SME in the UK claims £45,000 per year back on qualifying R&D spend.

In simple terms R&D Tax Credits:

  • Can generate 25p in the £1 for every £1 of qualifying spend on qualifying projects i.e companies executing projects with innovation at their heart.
  • For loss making companies this becomes a cash injection of circa 33p.

What should businesses do to speed up the R&D Tax credits ?

Get the right software

When you’re setting up your accounting, it can be tempting just to opt for the cheapest deal in order to save money. However, cloud accounting software can do most of the heavy lifting for you if you choose the right one.

You will want software that provides access to real-time financial data, laid out in a simple and effective manner. Most good-quality accounting software will be integrated with Xero or QuickBooks so you can view everything in one place.

Track your R&D expenses

If your company wants to make an R&D claim, it's good to have the right evidence. Although HMRC doesn't have a hard and fast checklist for what is required, these are the most common forms of record that we recommend for each type of cost. This will give some idea, although every claim is different, so do get in touch and we can advise on what is suitable for your company.

Staffing costs:

  • PAYE records, records of pension payments, list of R&D staff, R&D staff’s time sheets and contracts of employment for R&D costs.

Externally provided workers:

  • Contract or arrangement with the staff provider, copy of invoices received, evidence of payments - e.g. bank records, details of the activities carried out and any evidence of active supervision by the company.

Subcontract costs:

  • Invoices from subcontractors, evidence of the nature of the work subcontracted and the terms applicable and evidence of payments.


  • Receipts or contracts for software purchased, licensed or commissioned.

Begin the work before your year-end date

The majority of delays with respect to the submission of R&D tax relief claims are as a result of accounts being delayed in preparation. This can be for a number of reasons but some of the most common are:

  • Bookkeeping being done incorrectly
  • Revenue being recognised in an improper way
  • Capitalisation tables not being up to date after funding rounds, and
  • Inter-company/director’s loans not being updated

You can circumvent these problems by planning ahead.

Choose the right partner to navigate your R&D tax credits claim

You can also choose an accounting partner that knows the ins and outs of the R&D tax credits process, we know it is one of the most important decisions that a company faces, and can, in this instance, mean the difference between acquiring the funding necessary to push the company forward, or even staying afloat in an adequately efficacious manner.

We're here to help. Speak to our team at hello@theaccountancycloud.com, download our free business guide for tech startups today.

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