What are R&D tax credits?
Research and development (R&D) tax credits are a UK government incentive designed to encourage businesses to invest in technological and scientific advancement. They do this by providing financial benefits and tax incentives to eligible businesses that engage in R&D activities.
These credits typically cover the expenses related to research and development such as:
- Staff pay costs
- Supplies and equipment
- Subcontractor payments
Prior to April 1st 2024 the R&D initiative consisted of two main schemes: the SME scheme and RDEC. (Research and Development Expenditure Credit)
If a company’s accounting period begins before or after April 1st 2024, then their R&D tax credit claim falls under the new merged scheme, which was formed to simplify the process.