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Innovation Tax Reliefs

 

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Financial Reliefs or Incentives

HMRC provide a number of financial reliefs or incentives to encourage businesses to invest in innovation. These include:

R&D Tax Reliefs provide valuable tax deductions for businesses investing in eligible research and development activities. Small and medium-sized enterprises (SMEs) can benefit under the SME scheme, while larger companies may qualify through the Research and Development Expenditure Credit (RDEC) scheme. Collectively, these are often referred to as R&D tax credits.

From 1 April 2024, HMRC has merged the existing SME and RDEC schemes into a single, streamlined R&D Expenditure Credit (RDEC) system, with enhanced support for R&D-intensive SMEs (ERIS). While the qualifying expenditure rules remain the same, the calculation and tax treatment differ.

Under the new scheme:

  • A lower notional tax restriction is applied at step 2 of the payment process for small profit-making and loss-making businesses.

  • A more generous PAYE cap is available, making the relief more accessible.

👉 Use our R&D Tax Relief Calculator to estimate your potential claim.

The table below outlines the potential tax savings available under each scheme.

 

 

SME Scheme

RDEC Scheme

Merged Scheme - R&D expenditure credit (RDEC)

Enhanced R&D intensive support (ERIS) for SME’s

Up to 31/03/2023

From 01/04/2023

Up to 31/03/2023

From 01/04/2023

From accounting periods starting on or after 01/04/2024

From accounting periods starting on or after 01/04/2024

Profitable company

130% uplift on costs = 24.7% net benefit

86% uplift on costs = 21.5% net benefit

Headline rate 13% = 10.5% post tax

Headline rate 20% = post tax rate between 14.7% - 16.2%*

Headline rate 20% = post tax rate between 14.7% - 16.2%*

Not applicable

Loss making company

Costs plus 130% uplift = 230 x 14.5% repayable credit = 33.4% subsidy

Costs plus 86% uplift = 186 x 10% repayable credit = 18.6% subsidy 

10.5% subsidy

15% subsidy

16.2% subsidy

Not applicable

Loss making R&D intensive company

Not applicable

Costs plus 86% uplift = 186 x 14.5% repayable credit = 26.97% subsidy

Not applicable

Not applicable

Not applicable

Costs plus 86% uplift = 186 x 14.5% repayable credit = 26.97% subsidy
Contact Us

How can we help?

At TAP we provide HMRC-compliant R&D Tax Credit services tailored to innovative businesses. We offer a unique blend of technical expertise, experience, and a delivery approach where the client’s needs are our priority.

We work with owner managed businesses and private equity backed groups, together with large international and quoted groups.

Working across the UK and leveraging our international network, we can bring the latest tax opportunities based on evolving tax legislation and HM Revenue & Custom’s (HMRC) approach.

We have brought together a number of detailed webpages that should help you if your business is involved in creating intellectual property, developing techniques to improve efficiencies or working on developing ground-breaking ideas in your sector. Our pages will help you determine if your R&D activities are likely to qualify for tax relief and our R&D Tax calculator should help you quantify the amount that may be available to you.

If you are considering investment in R&D our team can help you understand what types of expenditure will be allowed and the best way to organise your accounting processes to ensure your claim is successful.

Innovation Tax Reliefs Team

Meet the talented individuals behind our success! Our team is driven by innovation, expertise, and a shared passion
Aidan James
Partner
Dan Howse
Partner
Helen Mallalieu
Partner
Jamie Favell
Partner
Jay Yoganathan
Partner
Michael Bull
Partner
Russ Cahill
Partner
Scott Wickham
Partner
Sophia Watsham
Partner
Robert Astley
Family Office Partner
Charlotte Davies
US Tax Director
Grace Bonse
R&D Tax Director
Ian Feaviour
US Tax Director
James Graham
Private Client Tax Director
Rachel Alabaster
Private Client Tax Director
Sucheta Thomas
Private Client Tax Director
Zohra Bala
Corporate Tax Director
Paul Spenceley
Tax Consultant
Carmen Shippey
US Tax Senior Manager
Emma Fleet
Corporate Tax Senior Manager
Nick Townend
Private Client Senior Tax Manager
Paul Flannery
US Tax Senior Manager
Richard Middleditch
Private Client Tax Senior Manager
Sydnie Payne
Private Client Senior Tax Manager
Thomas Quinn
Corporate Tax Senior Manager
Toyan Williams
Corporate Tax Senior Manager
Ben Greenwood
Private Client Tax Manager
Hemma Chana
US Tax Director
Jeethu Job
US Tax Manager
Kim Liu-Newman
Corporate Tax Manager
Nicky Hutchison
Accounts and Finance Manager
Oliver Baker
Accounts Manager
Olivia Denton
Corporate Tax Manager
Martin Sevtsov
Marketing Coordinator
Rachel Ezrachie
Office and Operations Manager
Sophie Richards
Office and HR Manager
Alina Miron
US Tax Assistant Manager
Alister Gracias
Private Client Tax Assistant Manager
Amy Johns
US Tax Assistant Manager
Danica Owen-Davidson
Private Client Tax Assistant Manager
Darshini Dayanand
US Tax Assistant Manager
Emma Beattie
Accounts Preparer
James Fothergill
Corporate Tax Assistant Manager
Hugo Costain
Private Client Tax Senior
James Davies
Corporate Tax Senior
Jess Bonner
Senior US Administrator
Talia Lockwood
Corporate Tax Senior
Ben Warner
Corporate Tax Assistant
Charlie Hill
Private Client Tax Assistant
Elias Cox
Corporate Tax Assistant
Vishnupriya Balakrishnan
UK Private Client Tax Trainee
View the entire team

Our Clients Love us

Scroll through the testimonials from our clients.

Our company has engaged with Tax Advisory Partnership on R&D activities. Their service has been solution oriented, proactive, and good value for money. We have developed a good relationship with Tax Advisory Partnership and find their R&D consultants to be good listeners. I would highly recommend Tax Advisory Partnership for their knowledge of the regulations and the ongoing support they offer.
CFO of a major F1 motorsport company
Our company has engaged with Tax Advisory Partnership on R&D activities. Their service has been solution oriented, proactive, and good value for money. We have developed a good relationship with Tax Advisory Partnership and find their R&D consultants to be good listeners. I would highly recommend Tax Advisory Partnership for their knowledge of the regulations and the ongoing support they offer.
CFO of a major F1 motorsport company

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