Farley And Partners

Research and development

Tax relief is available on qualifying research and development (R&D) expenditure at varying rates. These reliefs are for more than the amount spent and so represent a form of government grant. The relief is particularly generous for smaller businesses.

However, the relief is only available to businesses which operate as limited companies. This may be a critical issue to consider at the commencement of your business.

SMEs barred from claiming SME R&D tax credit by virtue of receiving some other form of state aid (usually a grant) for the same project may claim the large company R&D tax credit. This means they will qualify for relief at a higher rate on their expenditure.

If your company exploits a patent, you may be able to benefit from the ‘patent box’. This is an arrangement that reduces the effective rate of corporation tax of the income from exploiting the patent. 

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