Research and Development (R&D) tax relief is a government incentive which can reduce a company's tax liability. It was designed to encourage innovation and to act as a reward to companies who invest in it. Your eligibility for R&D tax credits depends on profitability, size, and the accounting periods being claimed for.

While recent changes to the R&D framework mean there are new complexities to consider, working with a specialist team who understands the legislation and are also industry experts is critical to preparing a robust R&D tax relief claim.

Discover how our consultants will help you claim what you’re entitled to.

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R&D Tax credits were introduced by the government in the year 2000, taking inspiration from other countries with the initiative already in place. HMRC (HM Revenues and Customs), the body overseeing UK tax collection administers the R&D tax credits initiative.

The scheme aims to provide valuable financial assistance to eligible companies to foster growth, and ultimately further their research and development via corporation tax relief, or a cash lump sum.

HMRC considers R&D to be being carried out if you are a limited company:

Modifying or improving a product, service, or process

Creating products, services, or processes

Solving technical problems with no apparent existing solution

In addition, the work must set out to resolve scientific or technological uncertainty, and is open to various industries, including software, life sciences and engineering.

Two schemes formerly characterised the R&D landscape:

Small and medium-sized enterpises (SMEs)

Research and Development Expenditure Credit (RDEC) designed for large companies and SME's that were contracted by large companies or received subsidies