Supporting Business Innovation Through Strategic Tax Relief
Research and Development (R&D) Tax Relief is one of the UK’s most valuable incentives for innovation-led businesses. Introduced by the government to drive economic growth and technological progress, it provides a powerful opportunity for companies of all sizes to reclaim a portion of their R&D expenditure, either as a reduction in Corporation Tax or as a direct cash injection.
Yet, many businesses still don’t realise they’re eligible. At P10 Financial, we specialise in identifying qualifying projects, maximising relief, and managing the claims process end to end, ensuring that no value is left on the table.
What Is R&D Tax Relief?
R&D Tax Relief is not limited to “white lab coats and science labs.” It applies to businesses solving technical problems, improving internal systems, developing prototypes, or enhancing existing products and processes.
The goal of R&D tax relief is simple: to reward companies that take risks to overcome scientific or technological uncertainty, where the outcome is not readily deducible or available in the public domain.
In practice, this includes:
Developing new products, processes or services
Enhancing existing systems to deliver better performance or efficiency
Integrating or customising software and platforms
Engineering materials, mechanical designs or automation tools
Running prototypes, trial and error, or extensive testing
Who Is Eligible?
To claim, your company must:
Be subject to UK Corporation Tax
Have carried out R&D projects that meet HMRC’s eligibility criteria
Have incurred qualifying costs during the process
You do not need to be profitable to benefit. Even loss-making companies can receive a cash credit for eligible R&D activity.
There are two schemes, depending on your size and funding status:
SME R&D Tax Relief
This scheme is for companies with:
Fewer than 500 staff
Either turnover of under £100 million or gross assets below £86 million
If eligible, you can:
Deduct an additional 86% of qualifying R&D costs from your taxable profits
Or, if loss-making, surrender the losses for a payable cash credit worth up to 18.6% of the qualifying spend
For every £100,000 of eligible R&D expenditure, this could equate to £18,600 in cash back from HMRC.
RDEC (Research and Development Expenditure Credit)
This scheme is for:
Large companies (over the SME threshold)
SMEs that have received state aid or grant funding for the R&D project
Under RDEC, companies receive a taxable credit of 13% of qualifying R&D expenditure (post-April 2023 rates). This can be used to offset Corporation Tax or, in some cases, received as a cash credit.
What Types of Activity Qualify?
A qualifying R&D project must aim to make an advancement in science or technology, and must involve overcoming some level of technical uncertainty.
Examples of qualifying sectors and activities include:
Software & IT: Building bespoke software, integrating APIs, cloud infrastructure, cybersecurity systems
Engineering & Manufacturing: Product development, production process innovation, automation, use of robotics
Construction & Property: Innovative materials, modular construction, building energy performance improvement
Life Sciences: Pharmaceutical trials, biotech innovation, healthcare platform development
Creative & Media: Game development, animation pipeline improvements, production workflow enhancements
If you’ve spent time and money solving difficult technical problems, adapting systems, or developing new offerings, there’s a strong chance your business qualifies.
What Can You Claim For?
Qualifying R&D costs typically include:
Employee costs: Salaries, NICs, pension contributions of R&D staff (including a percentage of support staff)
Externally provided workers: Agency workers, consultants (with some limits depending on scheme)
Subcontractors: 65% of costs paid to third parties for R&D activity (SME scheme only)
Software and cloud computing: Licenses used directly in R&D
Consumables: Materials, prototypes, utilities used up during the R&D process
Clinical trials: For life sciences companies
Data costs: Usage and acquisition of datasets for R&D
Costs must relate directly to the R&D activity and fall within the relevant accounting period. P10 Financial ensures your claim is accurate, defensible, and maximised.
When and How to Claim
You can submit an R&D tax relief claim through your Corporation Tax return (CT600), either as part of your regular filing or through an amended return. Claims must be submitted within two years of the end of the accounting period in which the R&D took place.
HMRC now expects a clear, structured technical narrative alongside your claim, explaining:
The nature of the advance attempted
The uncertainties faced
The methods used to overcome them
A breakdown of the qualifying costs
Incorrect or poorly presented claims risk delays or even HMRC enquiry. That’s why professional advice is essential.
Why Work with P10 Financial?
At P10 Financial, we bring together tax expertise, sector knowledge, and hands-on support to deliver successful R&D claims, without the jargon or the hassle.
Our team works closely with business owners, financial controllers, and technical leads to:
Identify all qualifying activities across your business
Maximise the claimable value across all eligible costs
Draft compelling technical reports and cost schedule
Submit directly to HMRC through your CT600
Defend your claim in case of HMRC queries or reviews
Build a repeatable R&D claim process for future years
