R&D Tax Incentives

R&D + claim = cash from HMRC. By making a R&D claim, a company can reduce its tax bill or receive cash from HMRC.

Who can claim

R&D tax incentives are available to a wide range of innovative businesses, including some of the following sectors:

You can claim if you develop new, or significantly improved:

  • Products, devices or components
  • Manufacturing processes
  • Software for sale or licencing
  • Software as a part of a product or a device
  • Software to make your business run more efficiently

Why make a claim

  • For a profitable company: to reduce its corporation tax bill
  • For a loss-making company: to claim cash from HMRC
  • To improve the company's cashflow
  • To make the company's balance sheet look healthier
  • To increase the company's reserves

How we can help

We can:

  • help you to identify R&D projects
  • prepare your R&D claims
  • deal with HMRC queries
  • review and replace your previously understated claims
  • help with setting up internal procedures to capture R&D data
  • help maximise the benefit from R&D tax losses
Software development

An independent payment processing company invested significantly in the research, design and development of its own innovative payment processing products, which included a range of additional and beneficial features which were unique to the marketplace.

We identified a number of areas of R&D. These included:

  • The development of a platform to provide the company and their customers with unique payment management and reporting tools
  • A bespoke modular payment application
  • The development of software and configuration download technology enabling uninterrupted use of the terminal
  • The development of physical demand interrogation software which draws conclusions about the device’s likely condition – a first in this marketplace

Tax benefit

The R&D claim resulted in a cash repayment from HMRC of £341,000.

New product and software development 

The company is a world leader in providing oxygen-enhanced MRI (OE-MRI). OE-MRI is a non-invasive and non-ionising imaging method that provides information on lung disease status and tissue oxygenation.

We identified a number of areas of R&D. These included:

  • The development of a platform, to analyse MRI scans of the lung in order to assist in the diagnosis and treatment of conditions
  • The development of novel MRI acquisition and associated analysis methods
  • The development of medical device software tools
  • Improvement of modelling techniques to generate quantitative imaging biomarkers

Tax benefit

The R&D claim resulted in a cash repayment from HMRC of £132,000.

Development of a new product

The company invested in the development of digital media displays for taxis in the form of the roof-mounted pods. The aim was to develop a technology that could provide remotely updated, location specific digital advertising display messages.

We identified a number of areas of R&D. These included:

  • The development of a readable screen, in terms of brightness and definition, that would work in all ambient temperatures and environments and be powered from a car battery
  • The building of a bespoke thermal management system to control the heat build-up in the pods in hot weather
  • To develop an anti-vibration system to protect the components from the vibration when driving over speed bumps and pot holes
  • The development of software to change the display according to the specific location of the vehicle

Tax benefit

The R&D claim resulted in a cash repayment from HMRC of £85,000.

Improved manufacturing process

The company is a manufacturer of scientific equipment and laboratory consumables. In addition to creating new products they have sought to improve their existing range of products and manufacturing processes.

We identified a number of areas of R&D. These included:

  • New and improved heating and control technologies
  • The design and development of a product that would not rust
  • Improvements to existing products including simplification to improve reliability and reduce the component count.

Tax Benefit

The R&D claim resulting in a cash tax saving of £58,000 over two years.

Improving the technical capabilities of satellites

The company is an independent research, innovation and technology company that drives innovation through the use of satellite. The company sought to manipulate and utilise data and imagery from satellites in a number of different ways on a large number of projects.

We identified a number of areas of R&D. These included:

  • Big data analysis and visualisation of satellite data to tackle the problem of illegal fishing
  • Solving communication problems in higher latitudes of the Earth
  • The creation of a platform that can provide data, information and tools to enable iceberg monitoring
  • Utilisation of next generation web technologies, to enable analysis of satellite Earth observation data that enables more targeted and specific responses to natural disasters, such as earthquakes.

Tax benefit

The R&D claim resulting in a cash repayment from HMRC of £200,000 R&D expenditure credits.

Professional practices investing in their business

A patent attorney, who having experienced significant growth in its business, sought a more efficient way of working. Patent work is complicated but also process driven. Having assessed the market for an ‘off the shelf’ solution, it was apparent that none of the available software packages had the capability to create personalised working practices in an electronic environment that encompassed all of the required enhancements. As a result, the Company undertook a large scale, complicated internal project to develop software to create electronic workflows, replacing the previously largely paper based system.

The project was costly as it required the company to invest in a significant number of man-hours. With limited funding available to the company, they sought access to R&D cash tax benefits to subsidise the cost of the project.

We identified a number of aspects of the development project on which R&D cash tax benefits could be claimed and we then helped them prepare their R&D claim.

Tax benefit

To date the Company has received £187,000 of R&D cash tax credits from HMRC, with an estimated additional £60,000 due in respect of the final phase of the project.

Contact us

Caroline Hunt
Caroline Hunt
Director, Corporate Tax