How the research and development tax credit could save you money

If you haven't heard of the research and development tax credit before, or are unsure of its application then it's important to review your expenditure to understand if your company can qualify for this relief. This is because your research and development (R&D) projects could provide a significant boost to your cash flow.

Unfortunately, many organisations fail to realise that their activities are eligible meaning they miss out on potential tax savings.

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What is R&D tax relief?

Projects being undertaken with the aim of achieving a scientific and/or technological advance through the resolution of uncertainty in these areas of work, are classified as R&D. This means R&D doesn’t just apply to medical research and laboratory work, far from it.

If you’re improving processes in your organisation, or attempting to, then there may be a case for making a claim. Your activity doesn’t have to result in a successful service, process, or end product to qualify.

Costs associated with exploring a new idea, or initiative, may be eligible even if the project fails, or is cancelled.

How does R&D tax relief work?

R&D costs are applied to reduce your corporation tax liability. It works whereby if your business is eligible then you can claim an enhanced deduction of up to 86% of your qualifying R&D expenditure. This means that for every £100 spent on qualifying R&D, your business can deduct an additional £86 from its related taxable profits.  This can result in a significant reduction in your corporation tax liability.

Questions to ask yourself:

  • Have you developed your own software?
  • Have you developed internal processes that reduce costs and improve production times?
  • Are you using existing technologies in a unique way? Are you using two or more existing technologies in a manner where they've never previously been combined?
  • Do you carry out any design work?
  • Do you manufacture products?
  • Has your organisation made advances in science and/or technology?

What are R&D tax credits, how do they work?

In the event that your business is loss making, R&D tax losses can be surrendered to HM Revenue & Customs (HMRC) for a cash refund, also known as a tax credit. This means that in instances where less than 40% of your total expenditure is on qualifying R&D, you can claim 10% of surrenderable losses back as a cash payment. If however, your R&D amounts to more than 40% of total expenditure, then the credit increases to 14.5%.

We have obtained claims successfully for businesses in a vast range of different areas and have saved our client base on average £1.6m per annum through R&D projects.


We find the following sectors tend to benefit from R&D related claims:

Aerospace Automotive
Biotechnology Construction
Defence Engineering
Food & beverage Manufacturing
Pharmaceutical Software development
University spin-offs  


Things to consider

  1. Do you have new products or services in the pipeline that might qualify?

  2. Have you reviewed your existing products or services against the criteria stated above?

  3. Do you have any current or pending patents that might cover services or products for eligibility?

  4. How robust are your back office reporting systems? Can they track this income accurately in the event of a review by HMRC?

What we do

Legislation concerning R&D tax claims is complex and ever changing. It requires an in depth understanding of your organisation, the law, and how it’s applied.

In the first instance we would look to hold an initial free meeting with you to explore and understand your expenditure. Relevant work and projects undertaken can then be identified. This allows us to assess the merit of a potential claim against the government’s complex eligibility criteria.

The process with our team is as follows:

  • Identify qualifying projects and costs
  • Work with you to prepare a detailed narrative and explanations about the projects being claimed for
  • Prepare calculations for submission to HMRC
  • Liaise with HMRC on any matters arising


Sarah Jaycock, Executive Director at High Spec Composites

Wellers changed our experience of R&D completely! They looked over our accounts and expressed their confidence in submitting a claim and explained in detail why we were in fact eligible and due significant refunds. We engaged in a couple of meetings, working through the finer details and just a few weeks later, we were over the moon to receive a large refund, just as they had advised.

Wellers made the R&D claims simple, understandable, and incredibly beneficial to our business. They have helped us to understand areas where we are eligible and assisted in adapting our business and financial records to make future claims even easier. The only regret we have is not meeting them and submitting claims sooner.

Sarah Jaycock, Executive Director at High Spec Composites

Why Wellers

By working with us you will have:

  • Peace of mind, as we understand the needs of your business and aren't working to just maximise a claim
  • Clarity courtesy of our transparent, fixed fee arrangement with no fixed contract
  • Confidence from our experience in dealing with HMRC and working alongside them to help clients get their claims through to achieve tax savings
  • Assurance, that as accountants and tax specialists, we can see the big picture, and from our wider knowledge of your business can understand the full implications of a claim
  • Certainty that our links with industry specialists in this field mean we understand the full validity of an R&D claim for the sector/industry in question

Fees for claims

There are many R&D specialists who will process your claim for a percentage of the saving achieved. We apply a far fairer, fixed fee formula that ensures your business can obtain a greater potential saving after professional fees have been applied.

Our fees are based on the complexity of your claim whereby the more complex the work to prepare a submission, the more time and knowledge required to:

  • Gather necessary information
  • Review documentation
  • Assess the eligibility of your R&D activities to identify qualifying costs
  • Prepare and process the claim on your behalf 

This means the fees we quote are dependent on your business activities and circumstances. We calculate them based on our hourly rates and an estimation of the time required for us to perform the work.

Please note any fees we quote, and service provided, doesn't include tax investigation services. We recommend this product when making an R&D claim. This can be purchased at an additional fee, in the event of a potential HMRC enquiry into your financial affairs.

Research and development tax credit services for SMEs