R&D tax credits: Are you missing out on hidden savings?

In today’s competitive business landscape, innovation is more than a buzzword—it’s a necessity. Yet, many UK companies pushing the boundaries of product development, software design, or process improvements aren’t fully leveraging one of the most generous government incentives available: R&D tax credits.

At Ballards, we help businesses uncover and claim valuable Research & Development (R&D) tax relief that they may not even realise they’re entitled to. If you’re innovating—even incrementally—you could be missing out on thousands of pounds in hidden tax savings.

What are R&D tax credits?

R&D tax credits are a UK government incentive designed to encourage companies to invest in innovation. They offer a tax reduction or cash payment to businesses undertaking projects that seek to achieve an advancement in science or technology.

Available to companies across sectors—not just science or tech—these credits can significantly reduce a business’s tax liability or provide a cash injection, making them an essential part of any innovation funding strategy.

Who can claim R&D tax credits?

One of the biggest misconceptions is that R&D tax credits are only for large corporations or those working in laboratories. In reality, any UK business that is innovating, improving, or developing products, processes, or services may qualify.

You may be eligible if:

• You’re designing or developing new products, software, or systems
• You’re improving existing technologies or processes
• You’re overcoming technical challenges with no clear solution
• You’re carrying out prototyping, testing, or trials

Industries that often qualify include manufacturing, construction, food & beverage, software development, agriculture, engineering, and even professional services.

How much can you claim?

The potential benefit depends on the size of your company and the scheme under which you claim:

SME scheme

• Available to companies with fewer than 500 staff and less than €100 million in turnover
• Tax relief of up to 21.5% of qualifying R&D expenditure (based on current UK rates)
• Loss-making businesses may receive a cash credit instead

RDEC scheme (for large companies or subsidised projects)

• Allows you to claim 13% of qualifying expenditure as taxable income
• Useful for companies that don’t meet SME criteria or have received grants

Changes to the R&D regime (effective from April 2024) are merging elements of these schemes, so it’s essential to have expert guidance on how the latest rules impact your business.

What qualifies as R&D?

Qualifying R&D doesn’t have to mean groundbreaking inventions. HMRC defines eligible activities as those that aim to resolve scientific or technological uncertainty.

Examples include:

• Creating bespoke software or automating processes
• Designing new machinery or tools
• Improving manufacturing efficiency
• Developing environmentally sustainable solutions
• Integrating complex systems or overcoming hardware limitations

The qualifying costs typically include:

• Staff salaries and NICs for those directly involved in the R&D
• Materials and consumables used in development
• Software used in the R&D process
• Payments to subcontractors and external researchers
• Certain overheads and utilities

Common reasons businesses miss out

Despite the generous scope of the R&D tax relief, many businesses fail to claim—or underclaim—for several reasons:

• Lack of awareness: They don’t realise their activities qualify.
• Misunderstanding the criteria: They assume only scientific work qualifies.
• Poor documentation: They don’t track costs or projects properly.
• Fear of HMRC scrutiny: They worry about triggering an investigation.
• Assumption they’re “too small”: Even microbusinesses can claim.

The Ballards approach to R&D tax claims

At Ballards, we’ve helped hundreds of UK businesses claim back significant amounts of tax through the R&D scheme. Our expert approach ensures you don’t miss out on what you’re entitled to—while keeping your claims compliant and well-substantiated.

Our services include:

• Free eligibility review: We assess your activities to determine claim potential.
• Detailed documentation: We prepare your technical and financial reports to HMRC standards.
• Maximised claim value: We make sure all eligible costs are captured.
• Compliance and risk management: We navigate recent legislative changes and support you in case of HMRC queries.

We make the process as simple and efficient as possible—allowing you to focus on innovation while we take care of the rest.

Real-world impact

We’ve seen businesses reclaim tens—even hundreds—of thousands of pounds they didn’t know they were eligible for. For some, this has funded further growth, hired new team members, or reinvested in further development work.

Whether it’s your first time applying or you want to review a past submission, our team can help you unlock the full benefit.

Get started with Ballards

If you’re asking “Do we do R&D?”, the answer may very well be yes. But identifying qualifying work and submitting a successful claim can be complex without the right expertise.

Let Ballards guide you through the R&D tax credit process—helping you recover costs, improve cash flow, and fuel future innovation.

Want to find out if your business qualifies? Get in touch with our R&D tax specialists today for a free initial consultation.