Research and development (R&D) tax credits are a very generous government incentive designed to encourage companies to invest in innovation and R&D activities. They provide a way for a company to claim additional tax relief from qualifying R&D activities.
Frequently Asked Questions
FAQs United Kingdom
Yes, companies receiving the Grant for R&D from Invest NI can make a claim although the benefits available can depend on the wording of the Letter of Offer.
Yes, HMRC wants companies to claim.
It wasn’t always this way and in the past HMRC could be inflexible. Its interpretation of what represented qualifying R&D was very narrow. Nowadays, though, HMRC is publicly encouraging companies to make claims where they are undertaking qualifying R&D activities.
To qualify for R&D tax credits, a company must be trying to achieve an advance in science or technology. This is often the case when a company is spending money on developing new products, processes or services – or improving existing products, processes or services.
The definition of R&D is wider than you might think, and the actual work does not have to be totally ground breaking. R&D can still qualify even if it has already been undertaken by another company, depending on the level of information that is in the public domain.
We find that companies often take the innovative things they do for granted. Perhaps the best way to illustrate what qualifies is to provide examples of recent claims we have made for companies:
- Food processor developing gluten free sausages
- Manufacturing company making fuel efficient new burners
- Company developing new anodising processes for the aerospace industry
- Farm machinery manufacturer making innovative new products
- Engineering company making bespoke steel products
- Nursery seeking to extend the growing season for lettuces
- Medical devices company developing advanced laparoscopic surgery products
- Distillery developing new gin, whiskey and poitín products
- Company trialling various anaerobic digester feedstocks
- Engineering company making advances in wind turbine technology
- Manufacturing company developing new composite products for the automotive industry
- Software company developing new business systems
- Mushroom grower seeking to improve quality and yield
- Printing company developing new packaging products
- Bakery seeking to extend the shelf life of products
- Craft brewer trialling different ingredients and processes
- Bioscience company developing innovative diagnostic tests for Africa
No, it is the R&D activity that is important rather than the success of the project. An R&D project that fails can lead to a strong claim, especially because it demonstrates just how difficult the project was.
A company registered in the UK can claim for the previous two financial years.
We will represent you in any enquiry from HMRC and will robustly defend any claim we prepare. This is included in our fee.
Our fee is normally a percentage of the tax benefits achieved, and is only payable if the claim is successful. Our rate is very competitive.
We have a great team of tax accountants and technical consultants (engineers, scientists and software specialists) whose aim is to maximise the tax benefits that you are entitled to.
Read more reasons here – why choose us.
We have a specialist R&D tax team with the aim being to maximise the tax benefits to you as our client. To achieve this, we get the necessary information from you and then prepare the claim on your behalf, to minimise the time you have to spend on it.
In this way, you get maximum benefit with minimum input.
FAQs Ireland
The Research and Development (R&D) tax credit scheme is a very generous government incentive designed to encourage companies to invest in innovation and R&D activities. It provides a way for a company to claim additional tax relief from qualifying R&D activities.
The R&D tax credit in Ireland is calculated as 25% of qualifying expenditure incurred in the carrying on of qualifying R&D activities.
For accounting periods commencing on or after 1 January 2024, the rate has increased to 30%.
In the Budget Statement by the Minister for Finance on 1 October 2024 it was announced that the amount of R&D corporation tax credit payable in year one will increase from €50,000 to €75,000.
To qualify, the R&D must be systematic, investigative or experimental, in a specified field of science or technology. Activities are qualifying where they seek to achieve a scientific or technological advance, and also involve the resolution of scientific or technological uncertainty.
Qualifying R&D can involve the development of new or improved products, processes, services, materials, or devices.
By way of example, we have recently prepared the following claims which have been accepted by Revenue Commissioners:
- Development of multi-instrument access devices for laparoscopic procedures
- Research in the area of hemato-oncology
- Development of orthopaedic devices for joint replacements
- Deducing methods for determining low-level pesticide concentrations in water
- Development of Machine Vision inspection systems
No, R&D does not have to be successful to qualify.
We will represent you in any enquiry by the Revenue Commissioners. This is included in our fee.
Our fee is normally a percentage of the tax benefits achieved, and is only payable if the claim is successful. Our rate is very competitive.
We have a great team of tax accountants and technical consultants (engineers, scientists and software specialists) whose aim is to maximise the tax benefits that you are entitled to.
Read more reasons here – why choose us.