R&D tax relief from HMRC

Research and development (R&D) relief or tax credits could help to reduce your organisation’s tax bill, helping to offset the cost of R&D work.


Essentially, this scheme aims to help offset the cost of investing in R&D by offering tax reductions. For most companies this will come in the form of corporation tax relief. If your organisation is small or medium-sized though, you may be able to choose a tax credit instead, in the form of a cash sum paid by HMRC.

You can only claim R&D relief if your business is liable for corporation tax. There are two schemes, depending on the size of your organisation; the SME scheme (for companies with less than 250 employees and less than £50m turnover) and the large company scheme (for those with more employees and turnover).

The SME scheme

Since 1 April 2015, the tax relief on R&D costs is 230%. This means, for every £100 of qualifying R&D costs, your company or organisation could have the income on which corporation tax is paid reduced by an additional £130 on top of the £100 spent. It also includes a payable credit in some circumstances.

The large company scheme

If you’re not an SME, tax relief is only available if you spend at least £10,000 a year on qualifying R&D costs in an accounting period.

You can find out more about R&D projects and costs that might qualify for tax relief on the gov.uk website, as well as the important terms and conditions. You can also find out more about how much R&D SMEs can claim and how to claim it.

Find out more

For more inforamtion contact one of the specialist HMRC units located throughout the UK, who will help you with your claim. 

Alternatively, you can contact our business growth team here at the LEP on 0113 3481818 or BusinessGrowth@the-lep.com to find out more. 

LEP Grants

Grants of between £10,000 and £250,000 are available for small and medium-sized businesses in the Leeds City Region, looking to grow their business and create new jobs.

Find out more

Business support and finance

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