Eligibility criteria

With the intention of R&D tax credits being to encourage new and exciting innovations in the UK, the replicated development of something that already exists will not qualify for R&D tax credits under HMRC’s definition of eligibility. Understanding HMRC’s specific definition of science, means that…

If your claim meets the eligibility criteria of R&D activity, you can still make an R&D tax relief claim even if the project is not completed yet. R&D tax credit relief is based on the qualifying activities and expenditure incurred during the accounting period, rather…

Many research and development projects stretch across multiple years. As long as the underlying activities remain eligible and the company continues to incur qualifying expenditure, a long-term project can form part of more than one R&D tax credit relief claim. This means a project does…

Can a partnership claim R&D tax credits? The straightforward answer is no. But, why? Limited Liability Partnerships (LLPs) cannot directly claim R&D tax credit relief because they are not subject to UK Corporation Tax. R&D tax credits operate as a form of Corporation Tax relief,…

R&D tax relief is only available to limited companies that are subject to Corporation Tax. Because of this, sole traders cannot claim R&D tax credits directly. For businesses carrying out qualifying research and development, they will often work with external specialists. Where a limited company…

If an SME is subcontracted to take part in an R&D project, it can only claim R&D tax relief where the subcontracting company is classified as a large company. Under the SME scheme, this will mean that SMEs subcontracted by other SMEs are generally unable…