Introduction to R&D Tax Credits

Listed Under: Blog

09 April, 2020

R&D tax credits support companies that work on innovative projects in science and technology. They can be claimed by a
range of companies that seek to research or develop an advance in their field. It can even be claimed on unsuccessful
projects.

The work that qualifies for R&D relief must be part of a specific project to make an advance in science or technology. It can’t be an advance within a social science like economics or a theoretical field like pure maths.

To get R&D relief you need to explain how a project:

looked for an advance in science and technology
had to overcome uncertainty
tried to overcome this uncertainty
couldn’t be easily worked out by a professional in the field

Your project may research or develop a new process, product or service or improve on an existing one.

R&D tax credits allow companies to:

deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction
claim a tax credit if the company is loss-making, worth up to 14.5% of the surrenderable loss