Small and medium-sized enterprises (SMEs) can claim enhanced tax relief on qualifying R&D expenditure which can either reduce the company's corporation tax bill or, for loss-making companies, provide a cash payment from HMRC. This can make a significant difference to the company’s bottom line.

The criteria for qualifying R&D expenditure can be complex, but generally, the project must aim to achieve an advance in science or technology and involve overcoming scientific or technological uncertainties.

Here are some key considerations for business eligibility for claiming R&D tax credits:

UK registered company subject to UK corporation tax with less than 500 staff and a turnover of under 100 million euros or a balance sheet total under 86 million euros. Certain criteria also apply to Linked and Partner Enterprises.

The business must be engaged in qualifying R&D activities, which involve the resolution of scientific or technological uncertainties.

The business must have incurred qualifying R&D expenditure, which includes costs within: consumable items, clinical trials volunteers, data licence and cloud computing, externally provided worker costs, staff costs, software, and sub-contractor costs.

The business must be able to provide supporting documentation to demonstrate the R&D activities and expenditure.