R&D tax relief is an incentive for all UK companies to be more innovative and creative thus giving a competitive edge. R&D has a far wider definition that many may think and less than 1% of companies in the UK are claiming R&D tax relief due to lack of knowledge as to what can be claimed.
If you pay UK corporation tax, R&D tax relief reduces your corporation tax bill, which can also result in a tax refund. If the company is in a loss making position a claim can be made for R&D tax credits or alternatively higher losses to carry forward or back. This can relieve pressures on cash flow and give the opportunity for further investment.
Your company can be any size and in any sector, and be carrying out any type of innovative activities. R&D tax relief can be utilised for testing and putting new processes or systems in place; testing and creating new products or materials; software development, new formula, and much more.