Can a sole trader claim R&D tax credits?
If you're a small business owner, then you're probably always looking for ways to reduce your taxes and keep more of your hard-earned money. One option that may be available to you is the Research and Development (R&D) tax credit. But does this credit apply to sole traders?
R&D tax credits are form of Corporation Tax relief and so — if you’re a sole trader — you’re not registered for UK Corporation Tax and so are not eligible to make a claim.
The conditions for claiming R&D tax credits as an SME are:
The company is subject to UK Corporation Tax.
The company meets the SME thresholds for headcount and turnover or balance sheet assets. See our previous blog for more information
The R&D activities claimed have not been contracted to the company.
Expenditure is deductible for Corporation Tax purposes in the claim period.
No grants or subsidies have been received in relation to the expenditure.
To unlock a higher level of rebate and to ensure you don’t get into trouble for making a claim, you do need a specialist to look at this for you.
To maximise your R&D claim, please contact us.