What are R&D tax credits?
The research & development (R&D) tax credit is designed to encourage innovation and increase spending on R&D activities for companies operating in the UK.
It’s one of the UK government’s top incentives for encouraging investment in research and development and allows up to 33% of a company’s R&D spend to be recovered either as a reduction in Corporation Tax or a cash repayment.
How do R&D tax credits work?
Companies that spend money developing new products, processes or services; or enhancing existing ones, are eligible for R&D tax relief. If you’re spending money on your innovation, you can make an R&D tax credit claim to receive either a cash payment and/or Corporation Tax reduction. The scope for identifying R&D is huge – in fact, it exists in every single sector. And if you’re making a claim for the first time, you can typically claim R&D tax relief for your last two completed accounting periods.