Research and development tax relief

Offering a cash benefit of up to 33.5% of total qualifying expenditure, a wide range of companies can claim this very generous tax relief.

What activities qualify for research and development (R&D) tax credits?

Watch our short video for an explanation of R&D tax credits and why they matter:

The definition of R&D for tax credit purposes is a wide one, and companies often carry out qualifying R&D activities without being aware of it. To qualify for research and development tax credits, a project must attempt to achieve advances in overall knowledge or capabilities through resolving scientific or technological uncertainties. Whether you are investing in developing a new product, system or process, there is a chance that the expenditure you have incurred qualifies for significant tax relief and we can help you take full advantage.

Fundamentally, if a company is carrying out R&D then a range of costs associated with the project – including associated utilities, staff costs, consumables and even external contractor costs are claimable.  There are two schemes, one for small and medium enterprises (SMEs) and another for large firms.  For SMEs that are profitable the additional benefit could be as much as 25% of the total expenditure and for loss making SMEs this could be a cash payment of 33% of total expenditure.  The large company scheme, RDEC (Research and Development Expenditure Credit), offers a less generous 10% cash benefit based on an indicative tax rate of 19%.


Profit making SMEs

  • Qualifying R&D expenditure – £500,000
  • £500,000 x 130% (enhancement rate*) = £650,000
  • Total cash saving = £123,500 (based on a corporation tax rate of 19%)

*The enhancement has the effect of multiplying the total qualifying expenditure by a factor of 1.3.

Loss-making SMEs

  • Qualifying R&D expenditure – £500,000
  • £500,000 x 130% (enhancement rate*) = £650,000
  • £500,000 (original expenditure) + £650,000 = £1,150,000 (enhanced expenditure)
  • Total cash back is calculated as £1,150,000 x 14.5% (surrender rate) = £166,750

How we can help

Many companies often do not take full advantage of what is a very generous incentive. This is where experience counts. We have advised a wide range of businesses from IT companies, food and drink, construction firms, health and life sciences and traditional manufacturers on the opportunities available. Our ability to identify when and where R&D occurs in your business is what really makes us stand out from the crowd.
Gateley Capitus R&D Brochure Pages

Download our Research & Development Brochure

For more information on the service we can provide for you, download our Research & Development: Tax Credits and Patent Box brochure.


Webinar: Claiming R&D tax reliefs before the FY2017 deadline

This webinar is essential viewing for businesses that have invested in research and development and would like to consider how they might recover tax credits on that investment.

The webinar is delivered by Head of R&D Tax Incentives for Gateley Capitus, Peter Jelfs, in conjunction with Paul Webster, Managing Director for our inward investment specialists, International Investment Services.


How to start the process

We can offer a complimentary consultation to discuss the nature of your business and assess the potential for identifying R&D activities within your company. Once appointed, we employ an effective methodology to ensure that at each stage we maximise the analysis of costs and provide a robust and transparent assessment that meets HMRC guidance.

The service we provide includes the provision of supporting documentation that can expedite the submission process and ensure a successful agreement with HMRC.

Case Study – Research & Development Tax Credits

A major concrete manufacturer and renewable energy company initiated several projects to develop new products, manufacturing techniques and processes. Their accountant suggested that they should consider asking Gateley Capitus to review the planned expenditure to assess whether qualifying research and development activity was occurring. We identified over £1.5m of qualifying expenditure.

Read more

Speak to the team

Peter Jelfs

Head of R&D Tax Incentives


  • R&D tax credit claim preparation, including negotiation and agreement with HMRC
  • Preparation of Patent Box elections

+44 (0) 121 212 7929

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Whether it’s a current investment project or you would like to discuss a historical review of expenditure, we can help.

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