Research and Development (R&D) tax relief is an incentive designed by the UK government to reward companies for investing in innovation. Tax relief from R&D can be a valuable source of cash for companies to invest in accelerating their research and development of new or existing products and processes, or hiring new staff and investing in business growth.
Any company spending money on developing new products, processes or services – or enhancing existing ones – is eligible to claim R&D tax relief.
You do not have to be operating within a specific industry or sector to claim R&D tax relief and there is no size limit, so SMEs can make a claim in exactly the same way that large corporations do.
It depends on a number of complex factors, but typically if you run a large company (501+ staff and £100m+ turnover/£86m+ balance sheet), then you can expect to get approximately to 10% of your investment back.
For SMEs, it depends how profitable you are, but typically the following rules apply:
View the full list of eligible expenses for R&D here.
If you’re claiming R&D tax relief for the first time, in most cases you will be able to claim tax relief for your last two completed accounting periods.
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