Tax Credits

Research & Development (R&D) Tax Credits Incentive Scheme is a UK Government initiative to stimulate more investments by companies in their research and development-related activities by claiming R&D tax credits and obtaining R&D tax relief.


To encourage companies to carry out in-depth research to bring innovation and value additions to their existing products or new products.

They can prove to be a valuable source of cash for business by investing in research and development tax credit, accelerating their R&D activities, hiring new staff and ultimately reaching new heights.

To further incentivize companies to claim R&D credits, its rates have been increased considerably in recent years. The incentives for R&D claims and R&D tax are available to all companies, regardless of the size. However, many companies doubt their eligibility for the R&D claim, or they assume the process to be complex.

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Moreover, you can claim tax relief for research and development expenses that are up to 3 years old. The size of your company and its tax rate will determine the exact amount of tax relief that you can claim.

R&D tax relief is available in every single sector. To such qualifying companies who spend money developing new products or services, new processes, or enhancing the existing ones are eligible for R&D tax relief.

No matter what size or sector the business is in, if it is taking a risk by attempting to resolve scientific or technological uncertainties, it might be carrying out qualifying activity.

To benefit from R&D tax incentives, the business must be a limited company in the UK subject to Corporation Tax, have carried out qualifying research and development activities and have spent money on qualifying projects.


Costs qualifying for R&D credits include:

  • Staff, including salaries, employer’s NIC, pension contributions and reimbursed expenses
  • Subcontractors and freelancers. Materials and consumables including heat, light and power that are used up or transformed by the R&D process
  • Some types of software
  • Payments to the subjects of clinical trials

The R&D tax credits are available to be claimed by various businesses regardless of their type and size. Any such business targeting efforts to bring innovation and improvement in its products or services and allocating a considerable amount of money for the purpose would be eligible for the R&D Tax credit scheme.

The incentives under the R&D tax credit claim depends on whether the business is an SME with fewer than 500 staff and either not more than €100 million turnover or €86 million gross assets or a large company with 500 staff members or more and either more than €100 million turnover or €86 million gross assets.

SME’s can claim an R&D tax credit through the SME R&D tax incentive to SME R&D relief allows companies to deduct an extra 130% of their qualifying costs from their yearly profit, as well as the standard 100% deduction, to make a total of 230% deduction and claim a tax credit if the company is loss-making, worth up to 14.5% of the surrenderable loss.

A large company can use the Research and Development Expenditure Credit. It can also be claimed by SMEs and large companies who have been subcontracted to do R&D work by a large company. The amount of tax credit is 13% from April 2020. To make an R&D credit calculation, you need to identify qualifying expenditures. When you deduct your enhanced expense from your taxable profits or add it to your loss, it will result in:

  • a Corporation Tax reduction if you are profit-making.
  • a cash credit if you are loss-making
  • or a combination of the two.

We can assist in realizing the potential R&D credits available. This scheme is equally available to all business sizes, whether small, medium or large. We can help you identify if your company could claim R&D tax credits. The effect of R&D claims will reduce profit, create a loss or increase the pre-existing loss. Reducing the gain means reducing the taxable income, and increasing the loss means increasing the reliefs.

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STEP 1Your Problem

Tax related issues whether relating to individuals, business, investments, or retirement situations are complicated, difficult to understand and handle and can have unusually a large incidence of cash outflows on your wealth if not managed properly.

STEP 2Our Observance

We can review and examine circumstances on a case-by-case basis to determine the extent of implications and repercussion as to how the tax rules and regulations can affect you.

STEP 3Our Suggestions

Based on our reviews and consultations as to your individual or business circumstances we can forecast the tax implications with certainty and advise as to what can be done to mitigate or lessen the tax impact.

STEP 4Your Success

Keeping in view of the complicated tax regime and the higher rates of tax, it makes sense to seek professional advice which can shed light as to how tax liability can be kept to a minimum.

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    Leeds: 94 Street Lane, LS8 2AL
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    Bradford: 22 Muirhead Drive, Bradford, BD4 0HJ
    OUR LOCATIONSWhere to find us
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    Taking seamless key performance indicators offline to maximise the long tail.

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