Moore Stephens: R&D tax relief explained

If your company performs any activities that fall within the tax definition of research and development, R&D tax relief could prove to be a significant boost for your business. Moore Stephens Partner Richard Thurlow explains more

R&D tax relief allows an SME to claim a tax deduction of up to 230% of the cost of qualifying R&D costs, meaning you could get up to 25% of qualifying research costs back in the form of a cheque.

A popular misconception is that research and development tax relief is aimed purely at medical and pharmaceutical companies. The view that you need to have a massive R&D department full of microscopes and people in white lab coats is a common myth. R&D tax relief is UK tax incentive designed to encourage businesses to enhance their knowledge base, primarily by solving issues they encounter whilst improving and developing their products.

Finding solutions may involve scientific and technological advancements; however these do not need to be groundbreaking. The main aspect of the relief is that the business has a problem with products, processes or the technology involved. The process of finding the solution to the problem forms the basis of the claim. The costs incurred will be appropriately assessed and the appropriate tax uplift rates applied. It can be quite surprising what costs can be claimed, so professional assistance is recommended to ensure you are properly rewarded for your efforts.

To date, the vast majority of R&D tax credits have been taken by large businesses, and SMEs are missing out. As long as your project seeks to achieve an advance in science or technology then there are major tax savings available – even if your business is a one-man band.

Moore Stephens has helped a diverse range of clients to make successful R&D claims, including those involved in software development, engineering, renewables/recycling, manufacturing, food production, housing and construction, and agriculture. Our R&D specialists can help you to understand whether you have a project that qualifies for R&D and which costs you can claim for.

We can make the claim on your behalf.
● If you can answer yes to any of the following questions you may qualify for R&D tax relief.
● Do you believe you have made any advances in science and/or technology?
● Do you employ any engineers, scientists or software developers?
● Do you manufacture anything?
● Have you developed your own software?
● Do you carry out design work?
● Are you using existing technologies in a unique way?
● Have you developed any softwaredriven processes that improve internal efficiencies (e.g. interfacing, processing speed, real-time processing etc.)
● Have you developed any nonsoftware- driven internal processes that reduce production times or cost or improve scalability?
● Have other companies asked you to undertake design, manufacturing or software development?
● Do you subcontract anyone to carry out design, manufacturing, scientific or technological work f or you? ● Have you filed any patents?

To find out whether you could be claiming, contact Moore Stephens, Rutland House, Minerva Business Park, Lynch Wood, Peterborough PE2 6PZ. Call 01733 397300 or visit

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