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Who is eligible to claim R&D tax relief?

A popular misconception is that R&D tax relief is aimed purely at medical and pharmaceutical companies. While these businesses can certainly benefit, the view that you need to have a massive R&D department full of microscopes and people in white lab coats in order to qualify is a common myth.

R&D tax relief is available across most business sectors. If your business carries out any of the following activities then there is a good chance that you will qualify:
  • Developing new or improved products or processes.
  • Developing prototypes or creating software.
  • Solving technical problems while developing products or processes.
As long as your project seeks to achieve an advance in science or technology then there are major tax savings available - even if your business is a one-man band.

You don't have to be profitable to make a claim either, even in a loss situation a tax refund is still available, but your business must be a going concern when you make the claim and not in administration or liquidation. 

Examples of potentially qualifying activity

The table below gives an indication of some, (but by no means all), of the activities which could qualify for R&D tax relief.
Sector Example of potentially qualifying activity 
  • Development of new strains of crops or livestock or new techniques to increase yields.
  • Development of new irrigation systems, pest control processes, animal fees or breeding techniques etc.
  • Process develop to reduce manufacturing times or reduce costs.
  • Design, construction and testing of product prototypes.
  • Improving product quality.
  • Innovative product or manufacturing equipment development.
Software development
  • Developing new or improved technologies.
  • Programming, compiling and testing source code.
  • New systems development.
Food production
  • Developing new recipes for food products.
  • Improving product formulations to extend shelf life or enhance flavour / texture etc.
  • Development of new production processes or the improvment of existing processes to improve efficiency.
  • Development of new or improved systems and processes.