Unlocking R&D tax credits

13 May 2022

Research and development (R&D) tax credits are a government incentive designed to reward UK companies for investing in innovation, and can be a valuable cash injection to help propel the business forwards, with £7.4bn being claimed by UK firms in 2020.

The relief supports companies that work on innovative projects in science and technology, and 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.

The work that qualifies for R&D relief must be part of a specific project to make an advance in science or technology. It does not apply to social sciences – like economics – or a theoretical field – such as pure maths. The project must also relate to your company’s trade – either an existing one, or one that you intend to start up based on the results of the R&D.

Eligibility is based on explaining how a project:

• looked for an advance in science and technology
• had to overcome uncertainty
• tried to overcome this uncertainty
• could not be easily worked out by a professional in the field

The “project” can include creating new processes, products or services, making appreciable improvements to existing ones and even using science and technology to duplicate existing processes, products and services in a new way. But pure product development in itself does not qualify. Some examples of qualifying activities include software development, engineering design, new construction techniques, bio-energy, cleantech, agri-food and life and health sciences.

Read our R&D Tax Credit page for more information on the eligibility criteria and the sums which you could claim and to discuss an application in detail, please contact Matt Ward, Director via matt@evansentwistle.co.uk