R&D tax relief – does your business qualify?

A lot more of your activities could be eligible for the UK Government’s research and development tax credit scheme than you might think. Sandy Findlay from ABGI explores what criteria companies must meet to make a claim.

It’s very simple. Any company working on a project to make advances in science or technology, and is addressing technical uncertainties, is likely to qualify. We process claims for customers in a wide variety of sectors, including aerospace, defence and other areas of manufacturing.

The research and development tax credit scheme was designed to support companies that work on innovative projects in a range sectors including manufacturing and engineering / Picture: Getty/iStock

The kinds of work which are likely to qualify for R&D relief include:

Process Innovation: projects focussed on modernising manufacturing (Industry 4.0 or Aerospace 4.0) including automation and digitisation projects, or those aimed at reducing environmental impact such as waste treatment, minimisation or elimination, or those looking to remove hazardous materials and chemicals from the process chain.

Similarly, Product Development activities, addressing problems created through design projects aimed at making products or components smaller, lighter, cheaper stronger or perform faster and more effectively. Experimenting with the use of new materials such as recycled or recyclable materials.

Information Technology: as with most sectors IT is now an intrinsic part of the design and manufacturing these days and there is significant eligibility in work around pushing the boundaries of machine learning and AI, development of IoT technology and capability, development of software for new generations of chips and architectures.

It is also worth bearing in mind that in the recent budget the chancellor increased the range of eligible expenditure to allow companies the claim benefit against the costs of cloud computing which should enable companies to recover some benefit for the costs of deploying “big data,” using cloud computing to ease the process of collecting, analysing and interpreting large volumes of data as used in digital simulation and testing projects.

It’s always wise to seek professional advice before undertaking a claim. With support from specialist advisers you’ll be able to:
• demonstrate which of your activities qualify under the scheme
• open up a new revenue stream to fund further R&D projects, and learn how to make the best use of the scheme going forward.