UK R&D tax relief FAQ
What qualifies as R&D for tax relief purposes?
R&D activities must aim to make an advance in science or technology by resolving scientific or technological uncertainties. This can include creating new products, processes, services, or improving existing ones.
Who can claim R&D tax relief?
Any UK limited company that is subject to Corporation Tax and is undertaking qualifying R&D activities can claim R&D tax relief. This includes companies of all sizes, from startups to large enterprises.
What costs can be included in an R&D tax relief claim?
Eligible costs include payroll costs for employees involved in R&D, consumables used in the R&D process, software used directly in R&D activities, and subcontractor costs.
How do I apply for R&D tax relief?
To apply for R&D tax relief, identify eligible projects, maintain detailed records of R&D activities and costs, calculate the total eligible R&D expenditure, and include the R&D claim in your company’s Corporation Tax return, with supporting documentation.
What documentation is required to support an R&D tax relief claim?
Detailed project descriptions, evidence of scientific or technological uncertainties addressed, records of staff costs, consumables, software, subcontractor expenses, timesheets, work logs, and financial records.
How long does it take to receive R&D tax relief?
HMRC decides how long a claim takes to process, and the time varies. We will keep you updated on progress and respond to any queries HMRC raises.
Can loss-making companies claim R&D tax relief?
Yes, loss-making companies can claim R&D tax relief and may be eligible for a payable cash credit, which can provide vital cash flow for further R&D activities.
Can small and medium-sized enterprises (SMEs) claim R&D tax relief?
Yes, SMEs can claim R&D tax relief. They can benefit significantly from the SME R&D tax relief scheme, which offers higher rates of relief compared to the scheme for large companies.
How often can I claim R&D tax relief?
R&D tax relief claims are made annually as part of your Corporation Tax return. You can claim for all eligible R&D activities conducted during your accounting period.
How we prepare your claim
We only include expenditure and projects where we consider there is a reasonable basis for claiming them. Where we do not think a cost or project qualifies, we will tell you, and it will not form part of your claim.
You remain responsible for providing complete and accurate information and for reviewing and approving your claim before it is submitted to HMRC. We prepare claims in accordance with the applicable legislation and HMRC guidance. HMRC determines the outcome of every claim and how long it takes to process.