R&D Tax credits

Research & Development (R&D) Tax Credits are a progressive type of tax relief available to any UK company that is contributing to the UK economy through innovation and research; be it through improving existing or developing new products, processes, services, devices and materials. Or, advancing the state of knowledge in their sector.

When can a business claim R&D Tax Credits?

Investment in R&D activity can be thought of as “projects”. Two primary criteria must be satisfied for a project to qualify as R&D for tax purposes; this is a definition set out by the Department for Business, Energy and Industrial Strategy
1. Projects must aim to advance overall knowledge or capability in a field of science or technology.
2. In pursuit of an advance it is necessary to have encountered technological uncertainty that required resolution as part of the project.

Who is eligible for R&D Tax Credits?

Any UK company that is innovating or involved in research and development of new and existing products can get access to R&D Tax Credits.
They apply to successful and failed projects and are particularly relevant to development of:
• Software and automation
• Innovative recipes and formulations
• New and improved materials
• Improved processes and methods
• New and improved products
• Environmentally friendly products and processes

While a lot of R&D Tax Credits come from the IT, healthcare and manufacturing sectors – they can be found across all sectors.
Eligible businesses must meet the following criteria:

  • Subject to UK Corporation Tax
  •  A ‘Going Concern’ at the time the claim is made
  • Credits are calculated based on qualifying expenditure incurred in the company accounts for each accounting period
  • We can look at any accounting period where the first anniversary of the due filing date has not passed. This usually means looking at the previous two accounting periods if they were each 12 months in duration.



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