R&D tax relief is the government’s way of rewarding businesses that are investing in innovation by developing new,
or improving existing products, processes, services, devices and materials or advancing the state of knowledge in their sector.
The relevant legislation is located in The Corporation Tax Act 2009. Guidance on the meaning of R&D is found in the BIS Guidelines on the Meaning of Research and Development for Tax Purposes.
There are nearly 5.5 million companies in the UK. According to HMRC statistics, there were only 35,145 claims made in 2014-15, 43,040 claims in 2015-16 and 52,335 in 2016-17. So far, 48,635 have been recorded for 2017-18.
Making an R&D claim
R&D tax relief can only be claimed two years from the end of your accounting period. This means that once your business enters a new tax year, you are no longer eligible to claim for any projects that took place more than two years previously.
Research carried out by Catax found that although around 78% of businesses are likely to be eligible for R&D tax relief, just 37% report claiming it.
Are you missing out?
How R&D Tax Relief Works