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Quarterly R&D Tax reporting is more beneficial than yearly reporting. But before we begin with why, let’s look at what R&D Tax Credits are.

R&D Tax Credits are offered by the government for research and development projects (R&D). In essence, to help fund innovative businesses in the UK. However, for small to medium enterprises (SMEs), the claiming process can be complex and overwhelming.

HMRC allows Research and Development (R&D) companies to report annually, but what are some of the internal benefits when reporting quarterly?

The three main benefits, we will look at in this blog post are:

  • Managing project budgets
  • Calculating the true cost of employees
  • Less disruption of the day to day

Quarterly R&D Tax reporting & Managing project budgets

By following quarterly reporting, you can better manage and understand the cost of delivery. This means that you can use your R&D tax claims to better understand the real actual cost of project delivery to help manage: burn rate, profitability, future pricing, project investment, and resource allocation. 

Reporting becomes more powerful to your business when done quarterly, compared to yearly. This is due to it cultivating a quicker decision and reinvestment process.

Quarterly R&D Tax reporting & Calculating the true cost of employees

Moreover, quarterly reporting also becomes beneficial for employees as companies are able to better understand the true cost of their employees such as: profit and loss (P&L), set more accurate budgets, understand the company cashflow, become more informed on recruitment decisions, staff retention and even helping managing pay rises.

quarterly reporting vs yearly reporting

Quarterly R&D Tax reporting &Less disruption on the day to day

The process of R&D tax reporting can be time-consuming. Furthermore, when it is left within a short period of time, it can become an unwanted, yet necessary distraction. Additionally, this can also mean trying to document activities that happened over 12 months ago. Conversely, you may also forget activities, missing out on eligible claims.

With this in mind, quarterly R&D tax reporting can help remove distractions from the day-to-day, provide shorter and more focused efforts, allow quicker documentation, and improve time management.

Not only will the process of quarterly reporting be more enjoyable for you, but you and your company will also have a greater chance of including all the activities and benefits, eligible for claiming R&D tax credits.

The process of quarterly reporting becomes more habitual, which will therefore also reduce the risk of late reporting. HMRC has penalties for companies for late reports. Therefore sticking to the more consistent flow of doing it quarterly, might be the best option for you. 


Even if you have been awarded a relief, HMRC may re-assess the return. Not to mention, they have the right to do so up to seven years after which the claim was made. They may do this if they believe there are inconsistencies with either other aspects of the company’s tax landscape or from the claim itself. They may even wish to perform random checks in which they give very little notice for doing so. This may start new issues as Staff may have let the company and many may not have the necessary information required to tackle the issue.

However, with the support of an R&D specialist by your side, they can make sure it is all done correctly, and your vision can continue whilst you are eligible for tax relief.

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Do you feel overwhelmed by it all?

If you feel overwhelmed by the process of a report and would like more clarity or support. Please feel free to contact us and we will help you with any enquires.

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