R&D tax relief was introduced as an incentive to encourage businesses to invest in innovation. Any investment that provides development to new or existing products, services or processes in the UK may potentially be rewarded with tax relief. One of the advantages of the scheme is that companies from almost any sector can qualify.
The R&D tax relief scheme is most commonly applied to businesses in the following sectors:
- Science and engineering
- Advanced manufacturing
- Software development
These are all sectors where innovation may be necessary for business success.
Some examples of further industries that can claim R&D Tax relief include:
- Agriculture
- Architecture/Construction
- Mechanical/Electrical
Updates following the Autumn Statement
The scope of R&D tax credits will be extended to include costs in respect of cloud computing and data development costs from 1 April 2023. This will be welcomed by many claimant companies, particularly those with a digital presence as these costs represent a significant proportion of their software development spend.
Find out more about this update in our Autumn Budget article here.
Sectors that focus on theoretical fields or social sciences such as pure maths and economics are unlikely to be able to claim for R&D Tax credit.
About Cowgills
Cowgills is a leading independent firm of Chartered Accountants and Business Advisors based in the North West of England – from Greater Manchester to Liverpool. We use our sector experience to deliver tailored financial solutions and support for growing entrepreneurial businesses.
Get in touch with our Head Office in Bolton, Greater Manchester, for any financial or R&D tax credit advice today on 01204 414 243.
Disclaimer
The information was correct at time of publishing but may now be out of date.
