Tax incentives & reliefs

Practice Portfolio is working in partnership with YesTax to provide R&D tax relief, capital allowances and Patent Box tax relief advice and support.

HMRC’s definition of R&D is purposefully broad. Whatever the size or sector, if a company is taking a risk by attempting to “resolve scientific or technological uncertainties” then it may be carrying out qualifying activity. This could include:

• Creating new products, processes or services
• Changing or modifying an existing product, process or service

This means if a business is not sure whether a project is scientifically or technologically possible, or they don’t know how to achieve it in practice, they could be resolving uncertainties and, therefore, qualify for R&D tax credits. The scheme works by giving additional tax relief on qualifying R&D expenditure and as a result of this, reducing taxable profits or increasing tax losses.

The Patent Box regime was introduced in the UK to incentivise businesses to commercialise their patented technologies. Patent Box works by reducing the tax paid on the profits derived from patented products.

Any company which does not have a patent can apply for one and benefit from the tax relief from the date the grant is applied for. It is frequently assumed that it can be a struggle to obtain a UK patent, but often a strong case can be made with a lower barrier to success.