What R&D tax relief means now
Businesses still commonly search for “R&D tax credits”, but the rules have changed. For accounting periods beginning on or after 1 April 2024, claims are generally made under the merged R&D expenditure credit scheme or, for qualifying loss-making R&D-intensive SMEs, Enhanced R&D Intensive Support (ERIS).
The name of the scheme does not decide whether a project qualifies. The central question is whether the company sought an advance in science or technology and had to address scientific or technological uncertainty that a competent professional could not readily resolve.
Read Lexmore's guide to R&D tax reliefWhere qualifying R&D may arise in Greater Manchester
Advanced materials and manufacturing
Projects may involve new material properties, coatings, composites, production processes, automation or methods of testing and validation. A claim should show what was not known or readily deducible when the work began and how the team attempted to resolve it.
AI, software and cyber security
Qualifying activity can arise in projects tackling limitations in model or system performance, data processing, security, scalability, latency or interoperability. Implementing known architecture, training an existing model on company data or configuring commercial software is not automatically R&D.
Health innovation and diagnostics
Manchester's health and research ecosystem supports diagnostics, medical devices, digital health and clinical technology. Claims may include the technical work required to resolve scientific, engineering or software uncertainties, but not all clinical, regulatory or product-launch activity.
Clean technology and industrial decarbonisation
Companies may undertake R&D while developing new energy systems, low-carbon materials, heat processes, monitoring systems or technologies for more efficient production. The environmental purpose is relevant context; the qualifying test remains the attempted advance in science or technology.
Examples are not an eligibility test
The sector examples on this page illustrate where qualifying work can arise. A company does not qualify because it operates in a particular industry or location, and commercial novelty on its own is not enough. Eligibility depends on the project, the state of knowledge in the relevant field, the uncertainties encountered, the work undertaken and the costs claimed.
Evidence matters more than the innovation label
Greater Manchester's innovation programmes and clusters can help locate promising businesses, but they do not establish eligibility. Good claims connect project records, competent-professional testimony and costs to a clear technical narrative. Generic percentages applied to the profit and loss account are not a substitute.
Patent Box in an advanced-materials and technology economy
Patent Box deserves consideration where a Manchester company has moved from experimental work into profitable, patented products or processes. Material-science, engineering, medtech and manufacturing businesses may have particularly relevant IP, although every calculation depends on the development and income facts.
Explore Patent Box tax reliefR&D tax relief questions from Manchester companies
Can an AI project qualify?
Yes, but using AI is not enough. The project needs to seek an advance in technology and tackle a non-routine technological uncertainty. The claim should explain the baseline, limitations and experimental work precisely.
What records should manufacturers retain?
Useful records include design versions, trial results, scrap or failure data, test reports, engineering notes, project plans, time records and cost ledgers. Records created during the project are generally more persuasive than a narrative reconstructed at year end.
Can a loss-making business receive support?
Potentially. The merged scheme and ERIS treat loss-making companies differently. ERIS is available only to qualifying loss-making, R&D-intensive SMEs, and the intensity and other conditions must be checked for the relevant period.
How Lexmore approaches a claim
Lexmore starts with an honest assessment of the project rather than an assumed claim value. We speak with the people who understand the technical work, establish the baseline that existed when the project began, identify the advance being sought and test whether the uncertainties meet the statutory definition.
We work with businesses across the UK and regularly travel to meet clients on site. Where practical, we prefer to see the operation for ourselves, meet the people behind the work and understand how the business develops its products, processes or technology. If an on-site visit would help us understand your R&D properly, we are happy to make that effort. Remote meetings remain available where they are more convenient or appropriate.
Where a claim is supportable, we then map the qualifying activity to the relevant costs, prepare the technical and financial evidence, support the Additional Information Form and work with your accountant on the Company Tax Return. Careful review is built into the process, and support is included if HMRC opens an enquiry into work we prepared.
Sources and further guidance
Unsure whether your project meets the R&D test?
Book a free initial assessment with Lexmore. You will get a straightforward view of the potential eligibility, the scheme and deadlines likely to apply, and what evidence a claim would need. If we do not believe the work qualifies, we will tell you plainly.