Can my type of business claim R&D tax relief?
The UK government’s Research and Development (R&D) tax relief schemes, such as the Research and Development Expenditure Credit (RDEC) and the Small and Medium Enterprises (SME) scheme, are available to businesses of various types and across all sectors, provided they undertake innovative projects that meet the criteria. The question “Can my type of business claim R&D tax relief?” is more about your business structure and the nature of your activities, rather than the industry you operate within.
To be eligible for R&D tax relief, must-haves must be ticked from a business structure standpoint. These are as follows:
- Your business must be a UK company subject to corporation tax.
- Your business must be trading as a going concern.
- Your business must not be in administration or liquidation.
- Your business must be undertaking qualifying R&D projects.
- Your business must have spent qualifying expenditure with respect to the R&D projects undertaken.
The first must-have – i.e., a UK company subject to corporation tax – means that businesses not subject to corporation tax generally cannot make an R&D tax relief claim. Consequently, sole traders are not eligible, and, in most cases, this also applies to limited liability partnerships (LLPs) unless certain requisites are met.
In relation to the nature of activities carried out by businesses, the key eligibility criteria for both schemes revolve around seeking to resolve scientific or technological uncertainties to deduce a scientific or technological advance. If your business is taking risks by trying to innovate in new or improved processes, materials, devices, products or services, your business could be eligible for R&D tax relief.
Here at Moore R&D, we specialise in identifying and maximising R&D tax relief for UK limited companies, helping them to benefit from these valuable government incentives. Contact one of our experts today to determine if your business qualifies. Innovation could lead to significant tax relief – do not miss out.
