Is My Business Eligible for R&D Tax Credits?

Many businesses in the UK are missing out on valuable R&D tax credits simply because they don’t realise they qualify. Contrary to popular belief, R&D tax relief isn’t just for tech firms or scientists—a wide range of industries can claim tax credits for innovation.

At Claimly, we specialise in helping businesses determine their eligibility and maximise their claims. In this guide, we’ll help you assess whether your business qualifies for R&D tax credits and how you can benefit.

Who Can Claim R&D Tax Credits?

R&D tax relief is available to limited companies in the UK that are subject to Corporation Tax. If your company has invested in innovation—whether developing new products, processes, or improving existing ones—you could be eligible.

To qualify, your business must be able to demonstrate that:

• It attempted to resolve scientific or technological uncertainty.
• The solution was not readily available or easily deduced by professionals in the field.
• The work aimed to make an advance in science or technology.

This means that a wide range of industries—including manufacturing, engineering, construction, software development, pharmaceuticals, and even food production—can qualify.

Key Eligibility Criteria for R&D Tax Credits

1. Your Company is a UK-Based Limited Company

Only UK-registered limited companies that pay Corporation Tax can apply. Sole traders and partnerships are not eligible unless they are part of a limited company structure.

2. Your Project Aims to Achieve a Scientific or Technological Advance

Your work must seek to develop or improve a product, service, or process in a way that goes beyond standard industry knowledge. If your project involved solving a technical challenge that wasn’t easily answered, you could be eligible.

Examples include:

• Developing a new manufacturing process to increase efficiency.
• Creating innovative software algorithms to improve functionality.
• Experimenting with new materials to enhance product performance.
• Finding new ways to meet environmental standards in construction or engineering.

3. Your Work Involved Technical or Scientific Uncertainty

To qualify, your project must involve an element of risk and uncertainty—meaning that at the start, it was not certain how to achieve the desired outcome.

Examples of uncertainty include:

• Trying to improve an existing technology but not knowing if it’s possible.
• Creating a prototype with unknown success rates.
• Developing a new formula, material, or technique that doesn’t yet exist in the industry.

4. Your R&D Work Was Conducted in the Last Two Financial Years

You can backdate R&D claims for up to two accounting periods. If your business carried out qualifying R&D activities but hasn’t yet claimed, you may still be eligible to recover costs.

5. You Incurred Eligible R&D Expenditure

HMRC allows you to claim R&D tax credits on certain qualifying costs, including:

• Staff Costs – Salaries, employer NI, pensions, and bonuses for employees directly involved in R&D.
• Subcontractor Costs – Payments to third-party specialists conducting R&D work.
• Materials & Consumables – Items used in the R&D process, including prototypes and testing materials.
• Software Costs – Software development tools used to create or improve products.
• Utilities – Power, water, and fuel used during R&D activities.

How Much Can You Claim?

There are two different R&D tax credit schemes depending on the size of your business:

1. SME R&D Tax Relief (For Small & Medium Enterprises)

To qualify as an SME, your company must have:

• Fewer than 500 employees
• A turnover of less than £100 million or a balance sheet total under £86 million

If eligible, SMEs can:

• Reduce Corporation Tax by up to 21.5% of R&D expenditure.
• Claim up to 27% of qualifying costs as a cash repayment if loss-making.

2. RDEC Scheme (For Large Companies & Some SMEs)

If your business does not meet the SME criteria or is receiving grant funding, you may need to claim under the Research and Development Expenditure Credit (RDEC) Scheme.

Under RDEC, businesses can:

• Receive a taxable credit worth 20% of qualifying R&D costs.
• Offset the credit against Corporation Tax or receive a cash payment.

At Claimly, we assess which scheme is best for your business and ensure you get the maximum benefit available.

Industries That Commonly Qualify for R&D Tax Credits

Many businesses wrongly assume they don’t qualify. However, R&D tax relief is not limited to traditional research laboratories. If your company works in any of the following industries, you may be eligible:

• Manufacturing – Developing new production techniques, machinery, or automation.
• Software Development – Creating bespoke software solutions, algorithms, or integrations.
• Engineering – Solving design challenges, optimising performance, or testing new materials.
• Construction & Architecture – Developing sustainable materials, energy-efficient designs, or new structural techniques.
• Pharmaceuticals & Life Sciences – Developing new medical devices, formulations, or testing methods.
• Food & Beverage – Creating healthier recipes, improving production methods, or extending product shelf life.

Even if you don’t see your sector listed here, you might still qualify. Claimly’s specialists can help you assess your eligibility.

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Why Choose Claimly for Your R&D Tax Claim?

Many businesses struggle with R&D tax claims due to a lack of expertise, time constraints, or fear of HMRC audits. That’s why working with Claimly makes all the difference.

✔ Expert Guidance – Our vetted tax specialists have deep expertise in both technical R&D analysis and financial tax compliance.

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✔ Maximised Claims – We ensure you claim every eligible expense, increasing your refund or tax savings.

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✔ Hassle-Free Process – We handle everything, from identifying qualifying R&D projects to submitting your claim.

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✔ HMRC Compliance – We ensure that your claim is fully compliant, reducing audit risk.

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✔ Fast & Efficient – We streamline the claim process so you can receive your benefit quickly.

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Calculate your claim here.