Government R&D Tax Relief
The UK Government provides a number of tax incentives and reliefs to companies involved in research and development (R&D) activities.
The work that qualifies for R&D relief must be part of a specific project to make an advance in science or technology. Find out more about what counts as R&D eligible for relief.
The tax relief on allowable R&D costs is 230%. This means that for every £100 of qualifying R&D costs, your company could reduce your corporation tax by an additional £130 on top of the £100 the spent.
Costs you can claim
You can claim certain costs on the project from the date you start working on it until you develop or discover the advance, or the project is stopped.
Eligible costs include:
- Employee costs for staff working on R&D projects.
- Subcontractor costs related to R&D.
- Consumable items used up in the R&D, including materials and utilities.
- Software licence fees bought for R&D.
- Clinical trial volunteers.
Companies that can claim relief include small and medium-sized enterprises with less than 500 staff, and a turnover under €100 million or a balance sheet total under €86 million. If your company makes a loss, you can opt to receive R&D tax credits instead of carrying forward a loss.
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