What Is R&D Tax Relief?




R&D Tax Relief for small to medium sized companies (SMEs) with < 500 employees AND  

< 100m Euros turnover or 86m

Euros on the balance sheet

Benefit is up to 33.35% of qualifying R&D costs if loss-making (which is available as a cash credit),  or 24.7% if profitable


R&D Tax Relief for large companies, and SMEs where the work is subsidised or subcontracted from 

a third party

Delivers a taxable credit (known as RDEC)  of 11% of qualifying

R&D costs, resulting

in a real benefit of 8.9%


R&D Tax Allowance for any company incurring

capital expenditure as part of pursuing  their

R&D activities

Companies can claim an immediate 100% deduction on the capital

cost in year one, creating

significant timing benefits

Whilst the expression “Research & Development” conjures images of laboratories, scientists and bunsen burners, the tax definition covers a wide range of activities across every sector. Consequently, if your company engages in innovation or technologically challenging work to improve or develop a design, product, material, service, tool, methodology, approach or process you may be able to claim UK R&D tax relief.

In 2000 the UK government began to introduce schemes aimed at reducing the cost of Research and Development (R&D) activities undertaken by UK companies. Intended to stimulate innovation, retain skills, drive investment, increase growth and ultimately create wealth, the schemes offer generous corporation tax reliefs for particular types of R&D activity. There are currently three separate schemes: