Question 1

Which businesses can claim R&D tax relief?

Accepted Answer

Any UK limited company subject to corporation tax can potentially claim, provided it is carrying out qualifying R&D activity. The scheme is not restricted by sector or company size. We regularly see successful claims from manufacturers, engineering firms, software developers, food and drink producers, construction companies, and professional services businesses.

Question 2

What counts as qualifying R&D activity?

Accepted Answer

To qualify, a project must seek to make an advance in science or technology by resolving scientific or technological uncertainty. In practice, this often includes developing new products, processes, or services, making appreciable improvements to existing ones, or creating bespoke software solutions. The work does not need to have been successful. HMRC accepts that genuine R&D often involves trial, error, and even failure.

Question 3

How much can my business claim?

Accepted Answer

The value of a claim depends on your qualifying expenditure, your tax position, and which scheme applies. Under the merged R&D Expenditure Credit (RDEC) scheme, eligible companies can claim a taxable credit on qualifying costs. Loss-making, R&D-intensive SMEs may be entitled to enhanced relief. We will provide a clear estimate of the likely benefit before any work is committed to.

Question 4

How far back can I claim?

Accepted Answer

Claims must generally be made within two years of the end of the relevant accounting period. This means there may still be an opportunity to claim for a prior year, provided the deadline has not passed. We will review your history as part of our initial assessment.

Question 5

What costs can be included in a claim?

Accepted Answer

Eligible costs typically include staff salaries, employer National Insurance and pension contributions, subcontractor costs, consumables such as materials and utilities used in the R&D process, software licences, and prototyping or trial costs. Not all business expenditure qualifies, so accurate apportionment is essential.

Question 6

Do I need to have made a profit to claim?

Accepted Answer

No. Loss-making companies can also benefit, often by surrendering losses for a payable credit, depending on the scheme that applies. This makes R&D tax relief particularly valuable for early-stage businesses investing heavily in innovation.

Question 7

Will claiming R&D tax relief trigger an HMRC enquiry?

Accepted Answer

HMRC has significantly increased its level of scrutiny on R&D claims in recent years, and any claim can be selected for review. A well-prepared claim, supported by a clear technical narrative and accurate cost calculations, is the best protection. We prepare every claim to a standard that is fully defensible if HMRC raises questions, and we handle correspondence on your behalf.

Question 8

How long does the claim process take?

Accepted Answer

The preparation timescale depends on the size and complexity of your activity, but most claims are ready to submit within a few weeks of our initial meeting. Once submitted, HMRC currently aims to process claims within around 40 working days, although this can vary.

Question 9

What information will you need from me?

Accepted Answer

We will typically need your statutory accounts, corporation tax computations, payroll information, and details of the projects you wish to include. We will also arrange a technical discussion with the staff involved in the R&D work. Our process is designed to keep the time commitment from your team to a minimum.

Question 10

How are your fees structured?

Accepted Answer

We will agree our fees with you in advance, based on the scope of the work involved. There are no hidden costs, and you will know exactly what to expect before any work begins.
Find out more

SADLER ADVISORY

RESEARCH & DEVELOPMENT TAX RELIEF

What is research and development tax relief?

Be aware of the time limits

Tax Relief on Qualifying Spend

R&D Tax Relief FAQ