R&D Tax Credits
For SMEs and large companies: identifying qualifying R&D activities and preparing claims.
Relief for companies that invest in innovation
The UK Government incentivises companies to invest in research and development by giving relief on qualifying R&D expenditure, or a payable tax credit. If your company invests in innovation, you may be entitled to either a tax reduction or a cash payment from HMRC, even if you’re making a loss. The relief available depends on your company’s circumstances and the scheme that applies.
For accounting periods beginning on or after 1 April 2024, the old SME scheme and the old R&D expenditure credit (RDEC) scheme have been replaced by a merged R&D expenditure credit scheme, which applies to most companies. Loss-making SMEs that are R&D intensive may instead be able to claim enhanced R&D intensive support (ERIS). We can help you work out which applies to your company.
You don’t need to be a laboratory scientist. R&D for tax purposes is defined broadly, and relief applies across all sectors. Construction, food manufacturing, engineering, healthcare, agriculture and financial services businesses all make successful R&D claims.
What qualifies as R&D?
R&D for tax purposes can include:
- Creating new software, algorithms or IT systems
- Developing new or improved products, processes or materials
- Overcoming technological or scientific uncertainty
- Trialling new manufacturing processes
- Developing new mobile applications or platforms
- Engineering and construction innovation
- Food science, pharmaceutical development and biotech
- Any project where the outcome was not readily deducible by a competent professional in the field
What does not qualify: arts, humanities or social science research; routine software development or maintenance; adapting existing products without technical uncertainty; market research or business development activity.
Who it's for
R&D Tax Credits are for companies in any sector that carry out qualifying research and development. It may be relevant if your company:
- Develops new or improved products, processes, materials or software
- Has worked to overcome technological or scientific uncertainty
- Has had projects that did not succeed, which can still qualify
- Is newly trading or claiming for the first time
- Is a loss-making SME that is R&D intensive
What you get
You provide technical information about what you worked on. We handle the HMRC paperwork, including:
- Identifying qualifying projects with you
- Documenting the R&D activities with your technical team
- The claim notification form, where HMRC needs advance notice of your claim
- The Additional Information Form (AIF)
- Calculating qualifying expenditure and preparing your CT600
- Responding to HMRC queries on your behalf
How the claims process works
- We conduct a discovery meeting to identify qualifying projects.
- We work with your technical team to document the R&D activities.
- Where HMRC needs advance notice of your claim (for example, if you are claiming for the first time), we submit the claim notification form within HMRC’s deadline. We then prepare the Additional Information Form (AIF), which HMRC requires for every claim before the Company Tax Return is filed.
- We calculate the qualifying expenditure and prepare your CT600.
- We submit the claim and respond to any HMRC queries.
Qualifying Expenditure
Qualifying expenditure can include:
- Staff costs (salaries, employer’s NI, pension contributions)
- Subcontractors and externally provided workers (EPWs), subject to rules on which company can claim and restrictions on work carried out overseas
- Consumables (materials, and water, fuel and power used in R&D)
- Cloud computing and data costs
- Payments to clinical trial volunteers
Failed projects can still qualify. The test is whether there was genuine technological or scientific uncertainty that you sought to resolve, not whether it worked. You can claim from your first year of trading, and pre-trading R&D expenditure may also be claimable in some circumstances.
Legitimate R&D claims remain robust. HMRC’s compliance activity targets fraudulent or poorly documented claims. A well-prepared claim is the best defence, and if HMRC opens an enquiry into your claim, we respond to HMRC directly on your behalf.
How it works
Your first call is a Tax Planning Discovery & Scoping Call. The purpose of the initial conversation is to understand your circumstances and determine where IB&Co can provide meaningful advisory support. From there, the process follows five clear steps.
Discovery
We start by understanding your circumstances and objectives.
Scope
We identify the areas requiring further consideration.
Review
Where appropriate, we undertake a detailed advisory review.
Recommendations
We provide professional guidance based on the agreed scope of work.
Ongoing Support
Where required, we provide ongoing planning and advisory support.
Meet your adviser
Ishmael Bangura, Managing Partner
Ishmael Bangura is the Managing Partner of IB&Co Accountants. He has been a practising accountant and tax adviser in the UK for about 15 years, and in that time has advised more than 950 clients, including startups.
Ishmael is also an entrepreneur who has built and exited businesses of his own, and that experience of running a business informs how he approaches tax planning with clients.
Other Tax Advisory Services
Tax questions rarely sit neatly in one area. Explore our other Tax Advisory services below.
Business Tax Advisory
For SMEs and growing businesses seeking a more proactive approach to tax planning. We help owners and directors consider the tax implications of business decisions before the year end, not after it.
Director Tax Planning
For company directors and shareholders reviewing remuneration and income extraction strategies. Salary, dividends, pension contributions and the timing of payments can affect both your personal and company tax position.
Corporation Tax Planning
For businesses seeking greater visibility and planning around Corporation Tax. We help you bring tax considerations into investment, expenditure and profit extraction decisions earlier in the year.
Personal Tax Planning
For individuals with multiple income streams or increasingly complex financial circumstances. A decision in one area of your finances can affect your tax position in another, so it helps to plan ahead.
Property & Capital Gains Tax
For property owners, landlords and investors. We help you understand rental income, joint ownership and Capital Gains Tax considerations before a sale, transfer or other major transaction.
Residency & International Tax
For internationally mobile individuals and those with overseas income or cross-border interests. We help you understand UK tax residency and overseas income questions before key decisions are made.
Inheritance Tax Planning
For individuals and families thinking about estate planning, gifting, trusts and reliefs. Inheritance tax planning is really about making sure your money goes to the people you care about.
Tax Investigation Support
For individuals and SMEs facing an HMRC enquiry, compliance check or disclosure. We act as your authorised agent and deal with HMRC on your behalf, so you do not have to face HMRC alone.
Stamp Duty Land Tax (SDLT)
For property buyers, including purchases through a company and mixed-use property. We advise on reliefs, the higher rates for additional dwellings and possible SDLT reclaims, ideally before you exchange contracts.
Frequently Asked Questions
No. R&D for tax purposes is defined broadly and relief applies across all sectors, including construction, food manufacturing, engineering, healthcare, agriculture and financial services.
Yes, it can. The test is whether there was genuine technological or scientific uncertainty that you sought to resolve, not whether the project worked.
Yes. You can claim from your first year of trading, and pre-trading R&D expenditure may also be claimable in some circumstances. If you are claiming for the first time, HMRC usually needs advance notice of your claim using a claim notification form, and there is a strict deadline for this, so it is worth speaking to us early.
You provide technical information about what you worked on. We handle the HMRC paperwork, including the Additional Information Form and the calculation of qualifying expenditure.
A well-prepared claim is the best defence. If HMRC opens an enquiry into your claim, we respond to HMRC directly on your behalf.
Not always, but it can help. Filing a return reports what has already happened. Tax advisory looks at important decisions before you make them, so you can understand the possible tax implications while there may still be room to plan.
Our Tax Advisory service is designed to complement your existing accounting and compliance work.
We quote after the discovery and scoping call, once we understand what you need.
Request a callback
Prefer us to call you? Leave your details, the service you are interested in and a convenient time, and a member of the IB&Co team will call you back to talk through your circumstances.
Find out if your work could qualify
Let’s start with your circumstances. Book a confidential initial conversation with IB&Co to discuss your circumstances and identify the areas where Tax Advisory support may be appropriate. Where detailed tax advice is required, we will explain the recommended next steps and engagement process.
Bring your latest accounts or tax return and a note of what you want to achieve.