R&D Tax Relief Support for Innovative UK Businesses
Professional support for companies undertaking qualifying research and development activities, including technical project assessment, expenditure analysis, claim preparation and Corporation Tax reporting.
We help businesses prepare robust and supportable R&D tax relief claims that accurately reflect their qualifying projects, expenditure and supporting evidence.
Research and Development Is Not Limited to Laboratories
A qualifying R&D project may arise where a company seeks an advance in science or technology and must resolve scientific or technological uncertainties.
Eligible activity can therefore arise in software, engineering, manufacturing, construction, food production, healthcare and many other commercial sectors.
Helping Innovative Companies Prepare Robust Claims
R&D tax relief is intended to encourage UK companies to invest in scientific and technological innovation. However, a claim must be based on qualifying activity and supported by appropriate technical and financial evidence.
At Odiri Tax Consultants & Accountants, we work with company directors, technical personnel and finance teams to understand the objectives of each project, the uncertainties encountered and the work undertaken to resolve them.
We then identify and analyse the relevant costs, prepare the supporting claim documentation and assist with the required Corporation Tax submission.
- Assessment of potential qualifying projects
- Identification of scientific or technological advances
- Analysis of scientific or technological uncertainties
- Review of qualifying expenditure
- Preparation of technical project descriptions
- Completion of the Additional Information Form
- Corporation Tax computation and return support
- Assistance with HMRC questions or enquiries
Comprehensive Support Throughout the R&D Claim Process
We provide an end-to-end service designed to produce accurate, appropriately evidenced and professionally prepared R&D tax relief claims.
Initial Eligibility Review
We discuss your activities, projects and technical challenges to determine whether there may be a credible basis for an R&D tax relief claim.
Project Identification
We help identify projects that may have sought an advance in science or technology and involved qualifying scientific or technological uncertainty.
Technical Interviews
We conduct structured discussions with directors, engineers, developers and other competent professionals involved in the relevant projects.
Technical Narratives
We prepare clear project descriptions explaining the baseline knowledge, intended advance, uncertainties encountered and work undertaken.
Expenditure Analysis
We review the relevant accounting records and identify expenditure that may qualify under the applicable R&D tax relief rules.
Claim Calculation
We calculate the potential relief or expenditure credit under the scheme applicable to the company and its accounting period.
Claim Notification Review
We establish whether the company must submit a claim notification to HMRC before making its R&D claim.
Additional Information Form
We assist with the detailed information that must be provided to HMRC before the R&D claim is included in the Company Tax Return.
Corporation Tax Submission
We support the inclusion of the claim within the Corporation Tax computation and Company Tax Return.
Claim Methodology Review
We examine allocation methods, assumptions and supporting calculations to help ensure that the claim has a reasonable and supportable basis.
HMRC Enquiry Support
Where HMRC raises questions, we help analyse the issues, prepare supporting information and formulate an appropriate professional response.
Ongoing R&D Claim Support
We help businesses improve their internal record-keeping and develop a more efficient process for identifying future qualifying projects and costs.
Understanding the Applicable R&D Scheme
For accounting periods beginning on or after 1 April 2024, companies may claim under the merged R&D Expenditure Credit scheme or, where the relevant conditions are met, Enhanced R&D Intensive Support.
R&D Expenditure Credit
The merged scheme provides a taxable expenditure credit for companies undertaking qualifying R&D activities.
Eligibility, expenditure categories, contracted-out activities and overseas costs require careful review under the current rules.
- Available to qualifying companies within Corporation Tax
- Based on qualifying R&D expenditure
- Credit is brought into account as taxable income
- Subject to statutory calculation and payment steps
- PAYE and National Insurance cap provisions may apply
Enhanced R&D Intensive Support
Enhanced R&D Intensive Support may be available to a qualifying loss-making small or medium-sized company that satisfies the applicable R&D intensity requirements.
The company’s SME status, relevant expenditure, connected entities and intensity calculation must be considered carefully.
- Designed for qualifying loss-making SMEs
- Company must satisfy the R&D intensity condition
- SME size and connected-company rules must be reviewed
- A grace-period provision may be relevant in some cases
- Cannot be claimed on the same expenditure as the merged scheme
Costs That May Be Relevant to an R&D Claim
The treatment of expenditure depends on the applicable scheme, the nature of the activity and the relationship between the company, its workers, contractors and customers.
Staffing Costs
Relevant salary, employer National Insurance and pension costs attributable to employees or directors directly involved in qualifying R&D activity.
Externally Provided Workers
Certain costs relating to workers supplied by another organisation may qualify, subject to the statutory conditions and applicable restrictions.
Subcontracted R&D
Contracted-out R&D expenditure may qualify depending on which party initiated or decided to undertake the R&D and the detailed contractual arrangements.
Consumable Items
Materials, water, fuel and power consumed or transformed during qualifying R&D activity may be relevant to the claim.
Software
Software used directly in qualifying R&D may be included on an appropriate basis where the relevant conditions are satisfied.
Data and Cloud Computing
Certain data licence and cloud-computing costs may qualify where they are directly attributable to qualifying R&D activity.
Innovation Can Arise Across Many Commercial Sectors
A company does not need to describe itself as a research business to undertake qualifying R&D. Eligibility depends on the nature of the project and the scientific or technological uncertainties addressed.
Software and Technology
New platforms, system architecture, integrations, algorithms, security solutions and technical performance improvements.
Manufacturing
New products, production methods, materials, machinery and manufacturing-process improvements.
Engineering
Prototype development, technical design, testing, performance improvement and complex engineering solutions.
Construction
Innovative building methods, structural solutions, materials, energy efficiency and complex site-specific technical challenges.
Food and Beverage
Product formulation, shelf-life improvement, manufacturing processes, packaging and ingredient substitution.
Healthcare and Life Sciences
Clinical technology, medical products, diagnostics, treatment processes and scientific development.
Agriculture
Crop development, production techniques, environmental solutions, equipment and agricultural technology.
Renewable Energy
Energy efficiency, low-carbon technology, waste reduction, storage systems and sustainable processes.
A Careful, Evidence-Based Approach to R&D Claims
An R&D claim should not be based on broad assumptions or an unsupported percentage of company expenditure. It must be founded on qualifying projects, reliable financial analysis and appropriate technical evidence.
We take time to understand what the company was seeking to achieve, why the solution was not readily deducible and how competent professionals attempted to resolve the relevant uncertainties.
This structured approach helps the company present a claim that accurately reflects its activities and is capable of being explained if HMRC asks questions.
Contact Our R&D Tax TeamA Structured and Transparent Approach
Our process is designed to establish eligibility, capture the relevant technical evidence and connect qualifying projects to the company’s accounting records.
Initial Assessment
We obtain an overview of the company, its projects, accounting period, previous claims and potential qualifying activities.
Technical and Financial Review
We interview the relevant personnel, identify qualifying projects and review the associated expenditure and supporting records.
Claim Preparation
We prepare the technical descriptions, expenditure calculations and required HMRC claim information.
Approval and Submission
The claim is provided for company approval before the required forms and Corporation Tax information are submitted.
Important R&D Claim Compliance Requirements
Companies making an R&D tax relief claim must provide an Additional Information Form to HMRC before the claim is submitted through the Company Tax Return.
Some companies must also submit a separate claim notification within the statutory notification period. Whether notification is required depends on the company’s previous R&D claim history and the relevant accounting period.
Early advice is therefore recommended. Waiting until the Corporation Tax filing deadline may result in a company missing an earlier notification requirement or having insufficient time to assemble appropriate technical and financial evidence.
R&D Tax Relief Questions
What qualifies as research and development for tax purposes?
A project may qualify where it seeks an advance in science or technology and involves scientific or technological uncertainty that could not readily be resolved by a competent professional working in the relevant field.
Does my company need to create a completely new product?
Not necessarily. Qualifying activity may involve the creation of a new product, process or service, or a material improvement to an existing one. However, the work must address scientific or technological uncertainty rather than routine commercial, aesthetic or administrative development.
Can software development qualify for R&D tax relief?
Software projects may qualify where they seek an advance in computer science or information technology and involve genuine technological uncertainty. Routine website development, standard configuration and the straightforward use of established tools would not ordinarily qualify by themselves.
Can an unsuccessful project still qualify?
Yes. A project does not have to succeed to qualify. An unsuccessful attempt may still demonstrate that genuine scientific or technological uncertainty existed, provided the statutory conditions are otherwise met.
Which R&D tax relief scheme applies to my company?
For accounting periods beginning on or after 1 April 2024, the relevant schemes are the merged R&D Expenditure Credit scheme and Enhanced R&D Intensive Support for qualifying loss-making SMEs. The company’s status, accounting period, profitability, expenditure and contractual arrangements must be reviewed.
What is an R&D claim notification?
A claim notification is a separate online notification that some companies must submit to HMRC before making an R&D tax relief claim. Whether it is required depends partly on the company’s previous claim history and the relevant accounting period.
What is the Additional Information Form?
The Additional Information Form supplies HMRC with details of the company, its qualifying projects, relevant expenditure and the agents involved in preparing the claim. It must be submitted before the R&D claim is made in the Company Tax Return.
Can the company claim subcontractor costs?
Potentially, but the treatment depends on the applicable scheme, the contractual arrangements, which party decided to undertake the R&D and where the relevant activity was performed. Each arrangement should be reviewed individually.
Can costs for overseas workers or contractors qualify?
Current rules restrict relief for certain overseas contracted-out R&D and externally provided workers. Limited exceptions may apply where the relevant conditions are satisfied, so the specific facts require careful review.
How far back can an R&D tax relief claim be made?
An R&D claim is normally made through the Company Tax Return within the applicable statutory amendment period. The precise deadline depends on the company’s accounting period and filing history. Early advice is recommended because a separate claim-notification deadline may also apply.
What records should the company retain?
Useful records may include project plans, technical reports, design documents, testing records, meeting notes, version histories, staff time records, subcontractor agreements, invoices and detailed accounting information. The evidence available will vary according to the business and project.
Can you assist if HMRC opens an enquiry?
Yes. Subject to reviewing the original claim and supporting information, we can help analyse HMRC’s questions, obtain relevant evidence and prepare a professional response.
Is Your Company Developing New or Improved Technology, Products or Processes?
Contact Odiri Tax Consultants & Accountants for a professional review of your potential R&D activities. We will consider the nature of your projects, explain the applicable requirements and provide a transparent quotation for the work required.
