Beyond the balance sheet

12 R&D questions you need to ask to save money via tax credits

Ercan Demiralay 29/9/2015 2 minute read

Ercan Demiralay FCCA on the areas to investigate within your business to understand what might be eligible for R&D tax credits.

As a business owner, it would be well worth reviewing your activities carefully to understand if you qualify for Research and Development (R&D) tax credits. That's because we find there are many misconceptions around R&D which means your growing business could miss out on potentially significant tax savings.

When (if at all) did you check to see if your company might be engaging in work that could be considered R&D? You'll be surprised by what does classify under that topic! With this in mind we’ve developed 12 questions to help you decipher if your company’s projects and expenditure are R&D worthy.

Don't fall into the trap of many other organisations who overlook items that could be eligible because they think its only applicable to scientific based work. As a general rule of thumb, if you're improving processes in the business or attempting to, then there could be a case for making a claim. That's quite a general statement, which is why you should read the below carefully.

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12 R&D questions you need to ask about your business


  1. Have you developed your own software?
  2. Have you developed internal processes that reduce costs and improve production times?
  3. Do you carry out any design work that enhances technology?
  4. Are you in the business of manufacturing products?
  5. Has your company made particular advances in science and/or technology?
  6. Are you using existing technologies in a unique way?
  7. Are you combining 2 or more existing technologies in a way they have never previously been used?
  8. Does your business function in any of the following sectors/areas that tend to benefit (but not exclusively) from R&D related claims?
  9. Do you have new products or services planned that could qualify based on any of the above?
  10. Have you reviewed your existing products against this criteria?
  11. Do you have any pending patents for products or services that could qualify?
  12. Are you able to track R&D related income through your finance function?

The sectors common to claims for R&D tax credits

What to do next?

Our questions are designed to simply get you moving in the right direction on this matter. If you’ve answered positively to any of the above then you need to get in touch with your professional advisor. That’s because the legislation around R&D is ever changing and complex.

It requires significant knowledge of the law and how it is applied by HMRC to understand if a project will qualify and the likely sums involved. In that sense question 12 is crucial, once the potential for a claim has been explored by your tax advisor, the next step is to identify all expenditure in connection with the R&D work. So you will need good records, systems and processes in place to achieve this.

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The content of this post is up to date and relevant as at 29/09/2015.

Please be aware that information provided by this blog is subject to regular legal and regulatory change. We recommend that you do not take any information held within our website or guides (eBooks) as a definitive guide to the law on the relevant matter being discussed. We suggest your course of action should be to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.


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