Innovation, research and development grants

R&D tax credits

Guide

Research and development (R&D) is a corporation tax relief that may reduce your business' tax bill. If you are a small or medium-sized business, you may choose to receive a tax credit instead, by way of a cash sum paid by HM Revenue & Customs (HMRC).

You can only claim R&D tax relief if:

  • your company is liable for Corporation Tax
  • your R&D project qualifies for relief

What qualifies as R&D for tax purposes?

Your project will only quality for R&D tax relief if it seeks to achieve an overall advance in science or technology - not just in your company's own knowledge or experience. The project must relate to your company's existing or intended trade and, if you're claiming as a small and medium-sized enterprise (SME), you must own any intellectual property that might arise from the project.

Who can claim R&D tax relief?

Both SMEs and larger companies can claim under the R&D tax relief scheme, if they are liable for corporation tax.

There are strict rules covering what counts as expenditure for tax purposes and you should not assume that your intended activity will qualify for tax allowances or relief.

You should check the R&D tax relief rules and guidance on how to apply carefully.

Support for claiming R&D tax relief

HMRC has specialist R&D units responsible for handling claims according to the postcode area. Find the appropriate HMRC specialist unit.

HMRC also has a free pre-recorded webinar giving a basic overview and introduction to R&D tax credits and the Patent Box, and explains who is eligible to claim, how to make a claim and where to get further help and advice for your business.

To help businesses understand the different tax relief schemes available through R&D, Invest Northern Ireland (NI) have also produced a detailed guide explaining the qualifying criteria and potential savings. Download Invest NI's R&D Tax Relief guidance (PDF, 272K).