RESEARCH AND DEVELOPMENT TAX RELIEF
R&D Tax Relief is a government incentive designed to reward innovation and support businesses that push boundaries in their field. Recent changes to the scheme mean that HMRC now require more detailed information from claimants and R&D providers. These changes aim to ensure compliance and safeguard the integrity of the scheme. It is more important than ever to work with an R&D specialist that understands the complexities of the R&D Scheme.
What is it?
Research and Development (R&D) Tax Credits are a Government-led scheme set up in the year 2000, designed to reward businesses investing in innovation. R&D Tax Credits offer financial aid to eligible businesses to further support their research and development, hire new employees and ultimately grow their business.
If you are designing, developing, or improving a product or service, or solving a problem with no existing solution then you could be eligible to claim. The scheme works by reimbursing a percentage of your development expenditure. Your relief can be delivered as a refund, a reduction on your tax corporation bill, or a cash lump sum.
Who qualifies?
R&D Tax Relief is available to UK-registered limited companies working on projects that aim to advance science or technology by overcoming uncertainties. It applies across all sectors, not just high-tech industries, and includes projects where the solution isn’t readily available to professionals in the field. Both SMEs and large companies can qualify, with SMEs benefitting from more generous relief, while larger companies claim under the RDEC scheme. Eligible costs include staff wages, consumables, software, and subcontracted R&D, provided they directly relate to the innovation. However, routine updates, aesthetic changes, or projects without technological or scientific advancement are excluded. Eligibility depends on factors such as company size and the nature of the R&D work, making tailored advice essential to maximise claims.
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