24 Nov 2017

How will the Budget affect R&D Tax Credits?

Sam Stephens

This week we saw the release of the Chancellor’s Autumn Budget.  This is always a nerve wracking time, however the good news is that the R&D Tax Credits schemes are still very generous.

Philip Hammond stated this week that R&D Tax Credits would be increased from 11 to 12 percent under the RDEC scheme.

This is good news, for those claiming under the RDEC scheme for companies with over 500 staff, as well as SME’s who have grant funding.

The RDEC scheme generates a tax saving equivalent to 9.7p for every £1 spent on eligible R&D.

The SME scheme for businesses with under 500 staff remained the same, and still remains very generous.

With an uplift of 230% on eligible R&D, the SME scheme generates a tax saving equivalent to 26p for every £1 of R&D spend!

This is further extended up to 33p in the £1 for loss making SME’s.


What is considered R&D?

There has always been a certain mystery surrounding what is considered to be R&D.  A common misconception is that R&D is purely what scientists undertake.

The truth is…

  • If you’re working on an advance in technology
  • If there is an element of uncertainty in your project
  • If you are developing a new process
    …no matter the sector you’re in, then you could be eligible to claim R&D Tax Credits.

​This lack of understanding as to what is considered as R&D is a major hurdle to accessing the scheme as the money companies get can back through the scheme is usually reinvested in future R&D.

If you are interested in claiming R&D Tax Credits for your business, use our online R&D Tax Calculator to work out how much your R&D Tax Relief could be worth.

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What defines guidelines for R&D tax purposes?

Within R&D tax credit frameworks, there exist varying degrees of guidance, each with distinct purposes. These are ‘Meaning of Research & Development for Tax Purposes: guidelines’, 'CIRD Manual (Corporate Intangibles Research and Development)' and ‘Guidelines for Compliance’

R&D Tax Credits
24 Nov 2023


There were some important announcements made regarding the future of the R&D tax credits schemes both in structure, operation and who can benefit as well as wider investment in R&D in specific sectors.

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