R & D Tax Credits

Overview

The UK Government is committed to making the UK a competitive place to innovate and grow. R&D schemes allow businesses that carry out qualifying R&D to mitigate their tax liability where businesses are liable for corporation tax (CT) or, in some circumstances, businesses may receive a payable tax credit. The value of these incentives and mechanisms varies depending on the size of the business.

What is R&D for Tax purposes?

In the UK, R&D for tax purposes is defined by the Department for Business, Energy and Industrial Strategy (formerly Business Innovation & Skills) in their guidelines. Broadly, the guidelines state that in order for a project to qualify for the various R&D schemes, the project activities should meet the following two key criteria:

1. It must seek to achieve a scientific or technological advance
2. Seek to resolve associated scientific or technological uncertainty.

Who is eligible?

Any company in any industry may be eligible for R&D tax credits. The key is that the company must be undertaking development activities that seek to achieve an advancement in technology.