Springfords LLP News

To receive our quarterly e-newsletter filled with the kind of news you can use, register here.

Research & Development Tax Credits

27 July 2016

Introduced to encourage and reward innovation, R&D tax credits are one of the most attractive tax reliefs available, often resulting in significant cash repayments from HMRC.

What’s even better news is that a lot more activities are eligible for the scheme than you might think.

How do I know what I can and can’t claim under the scheme?
In a nutshell, you must be able to demonstrate to HMRC that your product or service is truly innovative and, at a technological level, an advance on what’s currently available in the market.

According to HMRC, R&D for tax purposes is a project (or a component of a larger project), which “seeks to achieve an advance in science or technology [through] the resolution of scientific or technological uncertainty”. Encouragingly, R&D is still deemed to have taken place whether or not the project is actually successful; it’s the “seeking” that counts.

If your project meets these conditions, congratulations! You can claim R&D tax relief on its day-to-day costs and expenditure, including things like staff, subcontractors, materials, software and utilities.

And don’t be put off if your R&D doesn’t involve new technology; HMRC’s definition extends to substantially improving existing products and services as well, and includes the construction of prototypes.

Give me some examples
Here are just a few examples of what can be claimed for:


  • Improvements to manufacturing processes or machinery (doing things faster / at a better quality / with reduced waste or improved safety)
  • Computer models – for example, to evaluate stresses or fluid flow


  • Using new, unproven methods of manufacturing existing products
  • Developing ways of manufacturing new products
  • Increasing process efficiency / safety
  • Reducing emissions

How could my business benefit?
It’s hard to be specific without knowing the industry sector you’re working in. That’s why it’s always wise to seek professional advice before undertaking a claim.

Get it wrong and you could end up either:

  • claiming much less than you’re entitled to, or 
  • if your claim seems too large, flagging your case up to HMRC’s specialist R&D inspectors.

With support from the right specialist advisers, you’ll be able to:

  • demonstrate which of your activities qualify 
  • open up a new revenue stream to fund further R&D projects, and 
  • learn how to make the best use of the scheme going forward.

We’ve already successfully secured in excess of £1.32M of R&D tax-savings for our clients but would like to increase this total!

If you need any further information please contact Gillian Currie at or Jimmy Hair at

Contact Us
  terms & privacy
Part of Baldwins