What activities can you claim R&D tax credits on?

What can you claim R&D tax credits for?

Where there is innovation, there could be R&D tax relief. The R&D tax credits scheme is not just intended for industries like science or tech but to be applied wherever research and development is being undertaken. Many companies still don’t realise the potential that making a claim for R&D tax relief could have in financially supporting the business. One of the key questions to answer with R&D tax relief is what you can make a claim for. This is our quick guide to the activities that are likely eligible.

Any R&D, in any industry.

Whether you’re operating in the construction sector or the textiles sector, if you’re undertaking R&D then the same set of rules applies in terms of eligibility. The guidelines for what counts as R&D in order to qualify for R&D tax relief are incredibly broad – and designed to be so. These guidelines are set out in The Department for Business Innovation and Skills Guidelines on the Meaning of Research and Development for Tax Purposes (BEIS).

In basic terms, the R&D project must be focused on creating an advance in science or technology by overcoming scientific or technological uncertainties. There is a caveat to this: whatever solution the project is designed to develop must not be readily deducible by a competent professional in the field. So, in short, this means if your R&D investment is being poured into something that is intended to be better than what exists at the moment and what your competitors are doing then there is probably some qualifying R&D in there.

Breaking down the definition:

The BEIS guidelines can be broken down as follows:

  • An advance is a science or technology – This isn’t just about the individual business’ knowledge or capability but also advancing that of the sector or field as a whole.
  • Scientific or technical uncertainty – Uncertainty like this exists where something is scientifically possible or technically feasible but no one has yet developed a way to achieve this in practice; it is not in the public domain and could not be deduced by a competent professional.

What kind of activities are qualifying R&D activities?

There is no complete list of what will count as qualifying R&D so even if activities don’t feature on this list it may still be worth applying for R&D tax relief. It’s also important to mention that these activities can be carried out for the business but also, in certain circumstances, for client projects.

Qualifying R&D activities. Design analysis, creating prototypes, production trials, testing, design adaptation and optimisation, process/system/product design evaluation or development, project planning, feasibility studies, project administration or the training to support an R&D project.

Crucially, there are also a number of activities that definitely won’t qualify for R&D tax relief, including the commercial or financial parts of innovation, business admin, distributing goods or services and the non-scientific or non-technical aspects of something new.

R&D tax relief is available to any enterprise where innovation is happening – and could provide valuable financial support to your business.

R&D Tax Credits Loan with SPRK Capital

Claiming R&D tax credits can be a simple way to access vital funding for your business and is an opportunity not to be missed. SPRK Capital help you by giving you access to your tax credits faster; if you are interested in finding out more about our R&D tax credit loans, click here. Alternatively, contact us, and one of our experts will be in touch.

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