What are R&D Tax Credits

The R&D scheme aims to encourage companies to spend more on Research, Development and Innovation through corporation tax refunds or as a cash amount. The ultimate aim is to make British companies and products more competitive both nationally and internationally.

About the scheme

The R&D scheme, introduced by the government 2000, is designed to incentivise and reward companies that invest in innovation. This can be done in several ways including developing new systems, processes, products, materials, devices, or improving the way your business works.

R&D Tax Credits can benefit almost any company in any field and can even be claimed on projects that were ultimately unsuccessful. There is a strong possibility you are engaged in R&D activity without even realising.

The aim of R&D Tax Credits is to encourage greater spending on research and development and to promote investment in innovation and business growth.

Who can benefit

The R&D scheme can benefit any UK based limited company operating in any sector. Anything that helps you gain a competitive advantage in a new and innovative way could be eligible for relief. The major problem, for most businesses is simply recognising that their activities qualify as research and development.

If you can answer YES to any of the below questions the likelihood is you will qualify for R&D Tax Relief:

  • Have you made a technological advance?
  • Did you have to solve problems during development that were not immediately deducible?
  • Have you developed your own software or worked with a third party developer?
  • Have you developed new recipes, formulas or materials?
  • Have you improved your production processes or reduced waste?
  • Did you attempt to try any of the above without being successful?

Types of R&D Relief

There are two schemes in operation depending on the size of your company and whether the project has been subcontracted to you or not.

The Small and Medium Enterprises (SME) scheme applies to businesses with

  • Less than 500 staff 
  • Turnover of under €100m a balance sheet total under €86m.

The Research and Development Expenditure Credit (RDEC) scheme exists for companies that fall above the threshold for SMEs.

In case of any doubt we will advise you which scheme applies to your individual business and manage your claim accordingly.

Qualifying Criteria

To qualify for R&D relief each project that you have worked on must meet the specified criteria set out by HMRC.  As specialists in the field we are experts at identifying where advances have been made in science or technology and which costs can be included in the final claim.

To justify your claim, you must be able to prove that you have undertaken some of the following:

  • Looked for an advance in science or technology
  • Overcame an uncertainty
  • Researched or developed a new process, product or service or improved on existing ones
  • Found a solution that would not have been obvious to a competent professional
  • Improved efficiency, performance or reduced waste

What costs are included

Any expense incurred during the R&D process can be included and we are very experienced in maximising your claims by ensuring that every legitimate cost is included. Some of the main costs you can include are:

  • Employee salaries
  • Subcontractor costs
  • Technical analysis
  • Prototype costs
  • Testing (internal or external)
  • Materials used during the project
  • Manufacturing / Process development
  • Software development costs
  • The portion of utilities used for R&D

Benefits to business

The precise figures are complex to calculate depending on your companies’ circumstance but as your claim progresses we will give you sound, impartial advice to ensure you receive your full entitlement.

The R&D scheme is designed to help businesses grow and to become more competitive both nationally and internationally. We have found that companies already benefitting from the scheme have much more confidence when they consider future projects and developments.

If you think you might be engaged in R&D activity OR if you are thinking of embarking on a new project please give us a call for free without any obligation.

Sectors we work with

It is not just pure scientific research that is eligible for R&D tax relief.  The scheme benefits a wide array of businesses, working in multiple sectors. We have successfully managed claims for a wide selection of companies, including:

Engineering Companies - The Motor Industry - Legal Firms - Manufacturing Companies - Ice Cream Makers - Security System Providers -

Software Developers - Financial Services - Injection Moulders - Designers – Brewers - Building Suppliers – Food Manufactures

STILL NOT SURE – Give us a call, free of charge, and, without any cost or obligation, we can normally advise you within 5 minutes if you have a valid claim.


Call us on 0116 243 1243