Research and Development (R&D) reliefs support companies that work on innovative projects in science and technology. It can be claimed by a range of companies that seek to research or develop an advance in their field. It can even be claimed on unsuccessful projects.

You may be able to claim Corporation Tax relief if your project meets our definition of R&D.

Tax Credits Explained

In order to encourage Research and Development the UK Government introduced R&D Tax Credits in 2000.

This has proved highly popular with 86,000 UK companies claiming back almost £7.4bn in tax relief in 2020. R&D Tax Credits are a very niche part of the UK tax code that could bring your company thousands of pounds in tax relief.

• A government incentive aimed at advancing science and technology within UK companies
• Launched in the year 2000
• Rewards innovation, risk taking, and research and development
• You can backdate your claim up to two financial years.

Who is eligible?

Companies of all sizes can claim R&D Tax Credits.

The size of your business will determine which R&D Tax Credits scheme you are eligible for and ultimately what proportion of your spend you can claim back, but every business registered in the UK is eligible.

Eligible R&D activities:

• Overcoming technical challenges                               
• Creating and testing prototypes
• Streamlining processes
• Trialling new or substituting materials
• Developing bespoke software
• Trial and error
• Industry firsts

What can be claimed back?

R&D Tax Credits are calculated based on enhancing expenditure for research and development work, as the UK Government aims to reward innovation for SMEs and large companies.

• Staff wages and other related costs
• Payments made to sub-contractors and external workers
• The cost of materials consumed
• Software licensing costs
• Payments to clinical volunteers
• Light, heat, power and other utility costs.

https://www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief