R&D Tax Relief
R&D Tax Relief Marketing | For Manufacturers
R&D Tax Relief | For UK Manufacturing
UK companies can benefit from a tax relief or cash benefit of 20% of their qualifying R&D expenditure, while R&D–intensive loss–making SMEs may access an enhanced payable credit on qualifying expenditure of 27% as a cash payment.
If your business is solving scientific or technological problems that competent professionals cannot easily resolve, you may qualify for HMRC R&D tax relief.
What R&D Tax Relief | Covers for Manufacturers
R&D tax relief supports companies that are creating something new, enhancing an existing product or process, or replicating the performance of an existing solution by overcoming scientific or technological uncertainty.
In practical terms, this occurs when a business identifies a technical challenge and allocates funding and competent professional expertise to investigate solutions that are not already understood.
Relief applies from the start of the uncertainty through to the point where the scientific or technological uncertainty is resolved. An uncertainty arises when a competent professional cannot, using existing knowledge or available information, determine whether something is technically feasible or how to achieve it.
Eligible Projects | Must...
- Be carried out by a UK company, eligible for corporation tax.
- Aim to extend knowledge or capability in a field of science or technology.
- Seek to create, improve or replicate the effect of a product, process or service.
- Involve an uncertainty that a competent professional could not readily resolve at
the outset.
• Involve financial commitment to research, testing and analysis.
What Costs | Can Be Claimed
HMRC groups qualifying R&D expenditure into five core categories. These costs must relate directly to resolving scientific or technological uncertainty.
1. Staff & Externally Provided Workers
• Salary, employer NIC and pension contributions for employees and externally
provided workers (EPWs) directly involved in the R&D work.
provided workers (EPWs) directly involved in the R&D work.
2. Subcontractors & Overseas Restrictions
• For accounting periods beginning on or after 1 April 2024, contracted–out R&D
must be carried out in the UK (except for Northern Ireland companies under the high intensity scheme).
• The company that decides to undertake the R&D is the company that can claim
• You may include 65% of costs paid to an unconnected subcontractor, or up to 100% for a connected subcontractor.
3. Consumables
• Materials, components and items used up or transformed during R&D activity.
4. Software, Data & Cloud Services
• Software directly used for R&D.
• Data and cloud computing costs including data storage, computer resources,
operating systems, software platforms and eligible data sets.
5. Utilities
• Power, water and fuel directly consumed in R&D work
Get In Touch | Today!
If you want to find out more about how you can claim R&D tax credits to help with your website or digital marketing get in touch!