If you’re not sure whether your company is carrying out R&D activities, or if the R&D you do carry out qualifies for R&D tax credits, you’ve come to the right place.
In this article, find out more about what kinds of activities count as R&D and learn about the eligibility criteria across a variety of industries and sectors.
What does R&D look like?
If you are creating a new product, process or service, or improving an old one, your business could be carrying out R&D worthy of tax relief.
The government’s definition of R&D is broad by design, which can make it tricky to identify all eligible expenditures without the support of an experienced tax credits consultancy.
The R&D criteria
The government’s R&D tax relief scheme rewards activities which are ‘innovative’. For a project to be considered eligible for R&D tax incentives, it must meet the following three criteria:
- The activities undertaken throughout the project must fall within a specific field of technology or science.
- The project must involve ‘the resolution of a technological uncertainty’, which means a question over whether something is:
- scientifically possible,
- technologically feasible, or
- achievable in practice.
These can often be driven by constraints or challenges that need to be overcome.
- The project’s end goal must be to advance that specific field. THat’s defined as new knowledge or capability, but it can often be realised in the form of creating or improving a product, device, material, process or service, such as:
- Creating and developing something entirely new
- Changing or modifying something that exists already to make it better
- Duplicating an existing effect in a new or improved way.
So, if you or your team have any uncertainties regarding a project’s scientific or technological feasibility or practicality, it may qualify for R&D tax relief.
What qualifies as R&D in your industry?
To gain a better understanding of the kind of activities that count and R&D and are therefore eligible for tax relief, choose a link from the below list that best reflects your sector.
- What counts as R&D in the financial services sector >
- What counts as R&D in the engineering and construction sector >
- What counts as R&D in the energy sector >
- What counts as R&D in the food and beverage sector >
- What counts as R&D in the life sciences, pharma and biotech sector >
- What counts as R&D in the manufacturing industry >
- What counts as R&D in process engineering >
- What counts as R&D in the technology sector >
What kinds of activities don’t qualify for R&D incentives?
Routine activities such as copying or enhancing the appearance of an existing process or product doesn’t typically qualify as R&D. However, it can be a fine line, as using technology to create aesthetic effects may still be eligible.
We’ll help you uncover all qualifying R&D expenditure
Here at Ayming, we’re well versed in uncovering qualifying R&D activities and expenditure across a broad range of sectors. Plus, we’ve worked hard to build a strong relationship with HMRC, so we can help make sure that your claim is submitted correctly and processed as quickly and efficiently as possible.
Benefit from our 30 years of experience and speak to a member of our team about how we can help.