R&D Tax Credits

What are R&D tax credits?

Research and development (R&D) tax credits are a government incentive designed to reward UK companies for investing in innovation. They are a valuable source of cash for businesses to invest in accelerating their R&D, hiring new staff and ultimately growing. Research and Development (R&D) reliefs support companies that work on innovative projects in science and technology. It can be claimed by a range of companies that seek to research or develop an advance in their field. It can even be claimed on unsuccessful projects.

R&D Tax Credits

They are available to small and medium enterprises (SMEs) have been substantially increased over recent years. The super-deduction available has increased to 230% from 1 April 2015 with the cash back available to loss making SMEs now 33.35% of the qualifying expenditure. The rise in the rate of relief for SMEs means that the cash value of claims for tax paying companies is £26 for every £100 of R&D spend from April 2015 (based on a 20% tax rate) and £33.35 for companies with losses.

A company may qualify for the R&D Tax Credit if:

  • it is within the charge of CT in Ireland
  • it carries out qualifying R&D activities in Ireland or the European Economic Area (EEA)
  • the expenditure does not qualify for a tax deduction in another country.  

Why make a claim?

Successfully claiming R&D credits will: 

  • Provide your business with a non-repayable cash payment or reduce the amount of tax that your company pays, supporting cashflow. 
  • Help encourage your businesses to invest in R&D and boost innovation.
  • Help put the UK at the forefront of R&D and innovation around the world.

Are you eligible to claim R&D tax credits?

Any company in any industry may be eligible for R&D tax credits, however, you must be undertaking development activities that seek to achieve an advance in science or technology, or activities that directly contribute to advances by resolving scientific or technological uncertainty.