Should We Claim R&D Tax Relief?

What R&D tax relief is for

R&D (Research and Development) tax relief is a UK government incentive designed to support investment in qualifying R&D. For most companies, it provides a taxable above-the-line credit calculated by reference to qualifying R&D expenditure. Depending on the company’s tax position, the credit may reduce amounts due to HMRC or result in a payment to the company.

HMRC defines R&D as activities that aim to achieve an advance in science or technology through the resolution of uncertainty.

Work that may qualify

• Developing or improving software platforms or systems
• Creating new materials or products
• Enhancing manufacturing processes for efficiency or sustainability
• Adapting existing technologies for new applications
• Resolving technical problems where the solution was not readily deducible by a competent professional

Success is not the test

A project does not need to have succeeded to qualify. What matters is whether you set out to achieve an advance in science or technology, and whether a competent professional in your field could have readily worked out how to get there. If they could not, the uncertainty was real, and the work may qualify whether or not it worked.