On the First Day of Christmas the Taxman gave to me… R&D tax credits for free!

You might not get an actual present from the taxman to open on Christmas morning this year, but that doesn’t mean you won’t get anything from HMRC either. There are many tax reliefs and credits available for taxpayers to take advantage of, and not just at Christmas. So read on over the next couple of weeks for the Moore & Smalley Twelve Tax Breaks of Christmas.


This Christmas the shops will be bursting with new toys and gadgets to amaze and delight children and adults alike. These new innovations don’t come from nowhere but are the result of often extensive Research & Development work by the companies involved. The good news for any companies involved in R&D work is that there are very generous tax reliefs on offer for this work. Small and medium sized businesses (SMEs) can claim up to 230% of their qualifying R&D spend as relief against their tax bill or up to 33% of their qualifying costs paid back to them as a tax credit if they are loss making.


R&D arises when a company is seeking to make a scientific or technological advance through the resolution of scientific or technological uncertainties. The work must not be routine, and should not be readily deducible by a competent professional working in the field.


Research & Development can arise as part of the creation of a new product or process, or the appreciable improvement of an existing one. Here are some Christmassy examples of the sort of activities that might be R&D:

  • Research into developing and growing Christmas trees which grow quicker, look better and last longer without the pine needles falling off.
  • Researching and testing new materials to cut the cost of Christmas decorations and accessories
  • Developing crackers with a louder ‘bang’
  • Online retailers developing increasingly sophisticated software for tracking and delivering customer orders quicker and more efficiently than ever
  • Research into cheap, environmentally friendly packaging

For more information on the sectors and types of business activities where you might find R&D, read this recent article from our blog.


So while you are doing your Christmas shopping this year, think about the Research & Development that is behind your purchases. More importantly though, think about your own business. Are you developing new products or making improvements to old ones? Are you upgrading your existing processes by incorporating new technologies? If so, then get in touch to see if you can make a claim. You may be getting a Christmas present from the taxman after all this year.


Come back tomorrow for another Christmas tax break.