What is R&D Tax Relief?

R&D tax relief is a government incentive designed to reward companies developing new or improved products, processes, or services. Only businesses liable for UK Corporation Tax can benefit, and the project in question must focus on advancing knowledge or capability in a field of science or technology. From 1 April 2023, mathematical advances also qualify as science for these purposes.

To meet the criteria for R&D tax relief, an advance can be:

A new process, material, device, product, or service that significantly elevates overall understanding.
An appreciable improvement to an existing scientific or technological product or process (more than a trivial upgrade).
A novel way of replicating the effect of an existing process or product using scientific or technological insights.

Qualifying for R&D Claims

Your project must go beyond what’s already publicly available and attempt to solve a scientific or technological uncertainty. An uncertainty arises if a professional in the field can’t readily say whether something is possible, or how to achieve it, based on existing knowledge.

To strengthen your claim:

Document both successes and failures when trying to resolve uncertainties.
Show that qualified professionals were unable to find a straightforward solution using existing methods or research.
Demonstrate how your approach represents a genuine advance in your industry, rather than just for your own business.

Recent Updates from 1 April 2023

If you’re claiming R&D tax relief or expenditure credit for accounting periods beginning on or after 1 April 2023, you may need to submit a claim notification form. This is required if:

It’s your first time claiming R&D relief.
You haven’t made a claim in the last three years before the end of your ‘claim notification period’.

How We Can Help

Navigating the complexities of R&D claims can be time-consuming and confusing, particularly if you’re juggling multiple business priorities. Our accountancy firm offers specialist support to help you:

Identify Qualifying Activities: We’ll assess your projects to confirm whether they meet the eligibility criteria for R&D tax relief, particularly focusing on scientific or technological uncertainties.
Prepare Robust Documentation: From explaining technical challenges to outlining failures and breakthroughs, we’ll ensure your supporting evidence is both clear and convincing.
Manage Timely Submissions: We’ll guide you through the claim notification period and handle all necessary forms, so you never miss important deadlines.
Maximise Tax Benefits: With our expertise in the latest legislation, we’ll help you maximise your claim, minimising your tax liability and increasing funds for future innovation.

R&D Tax Credit Deadline FAQs

Can I Change My Accounting Period to Prolong My R&D Claim Window?

Yes. You can alter your accounting period dates and even lengthen the financial year to 18 months, which can effectively push your R&D claim deadlines further into the future.

My Business Is a New SME, When Does My First Accounting Period Begin?

It begins automatically on your registration date with Companies House. Many new businesses adjust their first year-end date (often to 5 April) to align with the UK tax year.

What If My R&D Project Started Before the Period I Can Claim For?

You may still be able to claim if you’re continuing to resolve the scientific or technological uncertainty in question. However, if the problem was solved more than two accounting periods ago, you usually won’t be able to claim relief for that project.

Your Next Steps

R&D claims can be a powerful tool for businesses committed to progress. The government’s support for innovation means there’s no better time to explore whether you qualify. If you think your scientific or technological project may be eligible or if you’re unsure our team is here to help.

Ready to explore your R&D claim? Get in touch with our specialists today to discuss your project’s potential and discover how much you could save.

For further details on qualifying R&D activities, visit the Government guidance. Our dedicated accountancy team can help interpret these rules and apply them to your specific situation, ensuring you don’t miss out on valuable relief.