There is scope for Companies that carry out Research and Development (R&D) projects within their businesses to claim tax reliefs on the work and costs involved.
Provided the R&D works meets the three criteria below there is potential to claim costs associated with the project.
These are:
Laurence Gould is working with R&D specialists TCM Capital to promote the scheme to the industry to prepare claims.
Tax Credits and Claims
A R&D tax claim can result in several different types of credits, whether the company is trading at a profit or loss. The level of tax credit a company can receive will vary depending on the year of the claim and also whether they have a history of claiming or not:
There were changes in the legislation which applies to R&D tax claims from the 1st April 2024. These were:
The table below sets out the time table for claimants who have not applied for R&D Tax credits in the past 3 years and for new claimants.
| Month Year End | Action for claimants with accounting periods in 2025 | Action for claimants with accounting periods in 2026 |
|---|---|---|
| September | X | Pre-notification required by 31st March 2026 |
| December | X | Pre-notification required by 30th June 2026 |
| March | Pre-notification required by 30th Sept 2025 | Pre-notification required by 30th Sept 2026 |
| June | Pre-notification required by 31st Dec 2025 | Pre-notification required by 31st Dec 2026 |
What type of research is eligible?
R&D for tax purposes takes place when a project seeks to achieve an advance in science and/or technology. Those activities that directly contribute to achieving this are considered to be eligible for R&D. Examples could include research into breeding new varieties, growing systems, new livestock breeds and feeding systems, new processing systems and techniques, equipment development and growing techniques.
Ideally if you have carried out or are planning to carry out research it is beneficial to contact us to discuss it so the work can be set up in the right way to make a future claim.
Eligible Expenditure
Whilst the claims can be made in arrears it is always helpful if the research was planned in advance to collect the relevant data for the claim. The planning wants to cover the design of the research, the aims and objectives, the outcomes form the research and the costs involved in carrying it out. The more recording that is made the stronger the evidence to support the claim.
The main costs for R&D projects are labour costs associated with R&D projects.
R&D tax credits remain a positive means of supporting businesses in the future. The industry lags behind other sectors, which considering the innovation taking place is surprising. For more information and a free exploratory meeting please contact us.
