UK R&D Tax ReliefA US perspective

The UK's R&D tax reliefs scheme generates significant tax savings for innovative UK subsidiaries of US businesses

UK R&D Tax Relief – an overview

A generous tax relief available to all eligible UK subsidiaries of US businesses (not just start-ups)
Available for businesses that are paying technical experts to solve technical problems – undertaking Product, Process, or Software development
Tax relief is worth between 10.53% and 33% of qualifying expenditure via Corporation Tax reductions, tax refunds, cash credits and the creation of additional tax losses– an unrivalled relief in the UK
Possible to recover a proportion of an equity investment or acquisition value via tax refunds or credits, for R&D work undertaken by the UK business

Getting your claim right is crucial, so it is advisable to partner with a reputable and technically expert UK R&D tax relief specialist that holds memberships with Professional bodies.

At Radius, we are passionate about going the extra mile for our clients and producing claims to the highest technical standard.

Our unrivalled approach takes away the burden of the claim process as we maximise the relief available within the parameters of the scheme. Radius are members of a select professional forum, which keeps us up to date with all policy and legislative changes, and allows us to help refine the R&D scheme itself. And our team includes an ex HMRC R&D Inspector to ensure our claims are robust and compliant with all current HMRC guidelines.

Tax savings for innovative UK businesses
Similar in benefit and operation to the R&D Tax Credit available to American companies, UK R&D tax relief is a significant tax break available to UK businesses. It is available to UK subsidiaries of American businesses, plus businesses with overseas private equity investment.
Long-established companies, along with start-ups across a range of sectors are eligible to claim.
The UK is one of the most innovative countries in the world, ranked fourth in the Global Innovation index. The government reinforces this by providing one of the most generous tax relief schemes available
As members of the Praxity Global Alliance, Radius are here to help all businesses – whatever their global structure – claim their full entitlement of UK R&D tax reliefs. Many companies do not realise they qualify.

Who can benefit from this relief?
The UK R&D Tax Relief scheme offers superb benefits to American businesses and private equity investors:
Are you an American business or private equity organisation with existing operations or subsidiaries in the United Kingdom?
Even early-stage businesses can benefit via cash-back tax credits for their initial R&D work.
Or are you looking to set-up a new company in the UK?
Are you an accountant, working with an American company or private equity investor that has operations or subsidiaries in the UK?
Although R&D work may be carried out by a UK business, American businesses based in the United States that have, or are planning of having links to a UK business that carries out qualifying R&D work, could stand to benefit significantly from R&D tax relief.

Projects that qualify for R&D Tax Relief
Software as a Service development
New software for projects or new functionality that extends the baseline of the existing technology
Development of new tools to extend the functionality of application software programs or operating systems
Novel and new data management techniques, such as new data structures or object representations.
Extensions to software and programming languages and tools
Complex integrations of multiple programs
New product development or appreciable improvements involving innovation to existing products, materials, or devices.
Process development – making the process leaner and quicker.

Case study examples of qualifying R&D projects

Public safety software company

A new wave of solutions for event and venue management. The company claimed relief on their development of an advanced events management system, providing a real-time solution to improve the situational awareness and threat resolution systems already existing in the market.

Software claim

R&D carried out by the company involved the development of new platforms and features, including functionality to centralise import processes and replace manual processes, reconciling batches of data, as well as a platform to process payments.

Cyber security specialist

Development of products to prevent attacks on APIs. Working at the forefront of their field, the company faced uncertainties surrounding processing a variety of possible data types, structuring data in a specialised way whilst processing it quickly.

E-Learning platform

Designing a unique learning platform to keep track of training and skills development. This required the development of bespoke software infrastructure and testing, with uncertainties surrounding scalability, security, and accessibility across several devices.

Analysis process development

A company conducts ongoing R&D into the creation of separation processes for chemical compounds. A new process is required for each compound, depending on its proposed use, with an infinite number of potential variables.

Greater energy efficiency

A company aimed to reduce energy use whilst not compromising product performance of refrigeration units. This included streamlining areas so that air flow capacity would remain optimal, therefore reducing the level of power required to run the system.

How Radius can help you
It can be difficult to keep up with the latest tax planning opportunities that could benefit your UK subsidiaries or investment companies.
That’s where we come in. Radius is an expert team of experienced R&D specialists based in the UK (part of Shorts Chartered Accountants), who are members of the Praxity Global Alliance.
Our team has a wealth of experience in working with the UK subsidiaries of global organisations across a multitude of fields on their UK R&D claims.
Our quality team includes an ex-HMRC UK R&D tax reliefs inspector and we undertake most of the work in preparing a claim, ensuring compliance with the relevant guidance and legislation.
Learn more about Praxity

Reduce Tax with Patent Box
Similar to the R&D scheme, Patent Box Tax Relief allows UK businesses to pay a lower effective Corporate Tax rate of 10% on profits arising from patented products or services.
This can apply where a UK business exclusively licences a patent, perhaps from an overseas group company.
The Radius team includes dedicated Patent Box experts who have gained a unique specialism in these rules ever since their introduction in 2013. Our team submitted some of the very first claims to be made under the Patent Box tax relief regime, and we have saved clients millions of pounds in Corporation Tax since then.
Download our free Patent Box Guide today to find out if you qualify.
Download Patent Box Guide

Our approach to R&D Tax Relief claims

Step 1: Free Consultation

We kick things off with a 30–60-minute initial discussion. This can be in person, over the phone, or via videocall. Here we will explore whether we believe a R&D tax credit claim is possible.

Step 2: Building your claim

The dedicated Radius team will help identify all qualifying R&D projects undertaken by the business and prepare the R&D tax relief claim on your behalf. Our Radius team does most of the work, including gathering all technical information, collating qualifying costs, and knowing all the right questions to ask.

Step 3: Maximising your claim

Radius will work with you to maximise your claim within the scope of the legislation. We will produce the technical report and a summary of qualifying costs required to support a claim.

Get started

Check your eligibility

You can find out if your UK-based company, subsidiary or client’s work qualifies for R&D tax relief by downloading our free Eligibility Checklist: 10 minutes and 11 simple questions to determine your eligibility to claim.

Download Checklist

Try our R&D Calculator

Find out how much R&D tax relief your UK client or subsidiary can claim using our R&D tax relief calculator.

Try the Calculator