Who is eligible for R&D tax relief?

Research & Development (R&D) tax relief was introduced to help businesses that are investing in innovation to receive a corporation tax deduction or cash payment from HMRC. While the relief has been available in the UK since 2000, there is still confusion around who can claim and the types of activities that are eligible.

At Taxar Innovation Partners, we have a wealth of experience within the R&D tax relief industry, working with thousands of different businesses to maximise their claim and get the best results possible.

Working on a laptop

Which industries can claim?

The short answer to this is pretty much all of them. No matter which industry your business comes under, if you’re investing in developing products, processes, software or services, it’s likely you’ll be able to make an R&D claim.

To make a claim, you must:

Be a limited company in the UK that is subject to Corporation Tax

Have carried out qualifying R&D activities

Have spent money on your R&D projects

R&D credits qualifying criteria

HMRC state that qualifying criteria for an R&D claim include:

  1. Creating new products, processes or services
  2. Changing or modifying an existing product or service

A good way to understand whether the activities your business have carried out are eligible for R&D tax relief is by asking yourself whether your project team faced uncertain outcomes at the start of the project, or were unsure if the outcome you were looking for was achievable.

If the answer is yes, then it’s likely you can claim R&D tax relief.

It’s worth noting that your project doesn’t have to be successful in order for you to make a claim, you can also claim on failed projects.

Staff, including salaries, employer’s NIC, pension contributions and reimbursed expenses

Subcontractors and freelancers

Materials and consumables including heat, light and power that are used up or transformed during the project or R&D process

Certain types of software

Payments to participants in clinical trials

Top claiming industries

As mentioned above, you can claim R&D in pretty much any industry or sector, however there are some which are far more prevalent in the R&D world than others.

Some of the top claiming industries include:

  • Manufacturing
  • Information Technology & Communication
  • Admin & Support Services
  • Wholesale & Retail
  • Professional, Scientific & Technical

Our R&D tax relief claim, appraisal and submission strategy also links to the process of embedding the core principles of innovation into your business culture, providing long-term benefits for your business as well.

If you want to find out more about making an R&D tax relief application and, at the same time, discover what we can do for your innovation culture, get in touch using the form below.

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