Research and development (R&D) tax credits are a form of tax relief to incentivise UK companies to invest in innovation. They can reduce your tax bill or you can claim payable cash credits as a proportion of your R&D expenditure.

R&D for tax purposes takes place when a project seeks to achieve an advance in science or technology. The activities which directly contribute to achieving this advance in science or technology through the resolution of scientific or technological uncertainty are R&D. Note that it is not just the traditional industries such as life sciences that undertake qualifying R&D. R&D can be undertaken in almost any industry and the definition of R&D is deliberately wide ranging to ensure industries are not discriminated against.

The government conducted a review of (SME) R&D and RDEC relief following the 2021 Spring budget. The consultation explored the nature of private-sector R&D investment in the UK, how that is supported or otherwise impacted by the R&D relief schemes, how well they operated and how the targeting of reliefs worked to be most beneficial for the UK economy. At the 2021 ...