Generous Research & development (R&D) tax incentives are available to encourage innovation in the UK. If your company is developing new products, processes, materials or services, there is a good chance that you will be able to claim relief.

Studies show that companies that invest in R&D grow and prosper in increasingly competitive markets. The UK government is going to great lengths to make sure this happens and has introduced significant incentives for R&D activities.

The reliefs apply to much more than traditional scientific research performed by people in white coats and specifically cover experimental development activities in manufacturing and software, amongst others. For every £1,000,000 spent on qualifying R&D a large company can deduct £1,250,000 from taxable income. SMEs can deduct £1,500,000 or claim a cash repayment of up to £240,000.

But we don't do any R&D
Are you sure? The definitions of R&D are widely drawn and in our experience companies have more qualifying activities than they think, so it's important to dispel some common misconceptions. When considering if you may qualify, bear in mind:

• R&D is not only performed in the R&D department.
• Engineering and software design can be R&D.
• Claims are still possible even if R&D costs are recharged.
• Large maintenance and upgrade works can be eligible.
• You do not necessarily need to retain the IP to make a claim.
• Eligibility is not contingent on the success of the work.
• R&D spend does not have to have been disclosed in the accounts.

For more information, download our publication Are you making the most of Research & Development  (PDF, 367KB).