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 Oxfordshire
Life sciences, therapeutics and diagnostics
Qualifying projects may include attempts to achieve advances in biological understanding, treatments, diagnostics, delivery mechanisms, laboratory processes or medical technology. The technical narrative should isolate the scientific uncertainty from routine testing, validation, regulatory and commercial activity.
Space, satellites and scientific systems
R&D may arise in propulsion, sensing, communications, materials, payloads, autonomy, data processing or equipment designed for demanding operating conditions. Meeting a novel client requirement does not itself qualify; the project must require an advance in underlying science or technology.
Quantum, AI and advanced computing
Projects may tackle fundamental or applied limitations in computation, control, error handling, algorithms, hardware or integration. The baseline and competent-professional analysis require particular care in fast-moving fields where capability changes quickly.
Energy and advanced engineering
Oxfordshire companies working in fusion, energy systems, materials, robotics and engineering may face genuine uncertainty during design, modelling, prototyping and scale-up. Costs and activities must be apportioned to the qualifying work rather than the full commercial programme.
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.
Spin-outs, grants and collaborative projects
University spin-outs and research-intensive companies often combine grant funding, investor capital, licensed IP and work performed by several organisations. Those arrangements do not determine eligibility, but they can affect which company is entitled to claim and which expenditure is available. Contract and funding review should take place before the calculation.
Patent Box for Oxfordshire technology businesses
Patent Box can become valuable when R&D begins to generate profit from patented products, licences or processes. The effective 10% rate applies only to qualifying relevant IP profits after the required calculation. The relationship between the company's R&D expenditure, patent rights, development activity and income streams should be mapped early.
Explore Patent Box tax reliefR&D tax relief questions from Oxford businesses
Can a pre-revenue spin-out claim?
Potentially. A company does not need to be profitable, although its tax position and whether it meets the conditions for the merged scheme or ERIS will affect how relief is delivered.
Are clinical trials automatically qualifying R&D?
No. Some scientific activity and qualifying costs may fall within an R&D project, but trial, regulatory and commercial activities need to be analysed rather than included wholesale.
Can R&D and Patent Box apply to the same innovation?
They can apply at different points in the innovation lifecycle: R&D relief to qualifying development expenditure and Patent Box to qualifying relevant IP profits. Their calculations and conditions remain separate.
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.