What are R&D Tax Credits?

You’ve got questions, we’ve got answers.

R&D Tax Credits are a very niche part of the UK tax code that could bring your company thousands of pounds in tax relief. The following FAQs will help you understand more about what R&D Tax Credits are, who they are for, and how they work. Of course, if your question isn’t answered, we’ll be happy to help.


Find out more information about claiming R&D Tax Credits with randd uk by downloading our leaflet. This includes six simple steps for making a claim, qualifying R&D activities, client recommendations and more.

Request your hard copy by contacting Marketing on 01332 477 070 or email sam@randduk.com.

What are R&D Tax Credits?

R&D Tax Credits are a company tax relief for research and development. They can either reduce a company’s tax bill or, for most small or medium sized companies, provide a cash sum. The aim of R&D Tax Credits is to encourage greater spending on research and development to promote investment in innovation.

Can I claim R&D tax credits even if I haven’t paid corporation tax?

Yes. ‘R&D Tax Credits’ is a term often used to describe the R&D tax relief schemes offered by HMRC. The Small to Medium Enterprise (SME) and RDEC schemes are designed to reward research and development activity by providing either relief on Corporation Tax, or cash credits even if the business is loss-making.

These cash credits are technically known as R&D tax credits. randd uk work with you to claim R&D tax relief and/or tax credits, depending on your company’s circumstances.

How do R&D Tax Credits work?

R&D tax credits are calculated based on enhancing expenditure for research and development work, as the UK Government aim to reward innovation for SMEs and large companies. In most circumstances, SMEs can submit their R&D tax relief to claim payable tax credits in cash from HMRC.

What kind of businesses can claim R&D Tax Credits?

A company can be any size to claim R&D Tax Credits. There  are two schemes available: the Small and Medium-sized Enterprises R&D tax relief scheme and the RDEC scheme. See our Qualifying page to find out which scheme you are eligible for. Don’t worry if you don’t know which scheme is right for you! randd uk can quickly determine the appropriate option for your company.

Is my business eligible for R&D Tax Credits?

The size of your business will determine which R&D Tax Credits you are eligible for and how much you can claim, but every business registered in England and Wales is eligible to claim either the Small and Medium-sized Enterprises R&D tax relief scheme or the RDEC scheme. Take a look at our Qualifying page for more industry-specific information.

What kind of work qualifies for R&D Tax Credits?

Often the problem for businesses is simply recognising that they qualify for R&D Tax Credits, and understanding which business activities count as research and development.

The work constituting research and development for Tax Credit claims is wide and varied. We work with companies from a wide variety of industries.