All UK-registered limited companies are eligible – it really doesn’t matter what industry sector they operate in. A limited-liability partnership (LLP) can only claim if a Corporation Tax-paying firm outsourced some of its R&D to the LLP. Sole traders are ineligible.

There is a lot that can qualify for R&D tax relief. This can range from planning, designing, testing and analysis methods through to the creation and adaptation of materials, equipment or software. Even staff time given to things like the record-keeping, maintenance, security protection and training in relation to the R&D project can all count under the R&D Tax Credit Scheme. But it’s worth getting in touch to find out more.

Throughout history, the UK – birthplace of the telescope, the telephone, the television and the text message – has been at the forefront of innovation and invention. To keep the country at the cutting edge, the government’s Industrial Strategy has committed to raising total R&D expenditure to 2.4% of GDP by 2027, up from 1.7% in 2018. And, because government research shows that every pound it gives out in R&D tax relief returns between £2.40 and £2.70 in extra R&D investment, the R&D Tax Credits scheme has been designed to facilitate this.

That depends on your company’s circumstances. But when it released its figures for 2018-19 – the year for which the figures are most recently available – the government found the UK’s biggest firms had made 7,105 claims under the RDEC scheme, for a total of £2.4 billion. That made the average large-company RDEC claim almost £350,000. There were 52,160 claims under the SME scheme with the average pay-out standing at £57,515. A further £265 million was shared by small and medium sized companies from the RDEC scheme.

Some claims are purely for a reduction in Corporation Tax liability. But in some cases, an SME might use its R&D tax credit to reduce its tax bill to zero, and then take the rest as a cash payment. In other cases, the SME might carry forward its tax credit to future years. A large-company, RDEC claim will normally be paid back as a cash rebate on the paid tax.