{"id":1834,"date":"2026-01-15T10:36:48","date_gmt":"2026-01-15T10:36:48","guid":{"rendered":""},"modified":"2026-07-26T19:02:11","modified_gmt":"2026-07-26T17:02:11","slug":"what-you-need-to-know-before-your-next-rd-investment","status":"publish","type":"article","link":"https:\/\/leyton.com\/uk\/insights\/articles\/what-you-need-to-know-before-your-next-rd-investment\/","title":{"rendered":"What you need to know before your next R&amp;D investment\u00a0"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1834\" class=\"elementor elementor-1834\" data-elementor-post-type=\"article\">\n\t\t\t\t<div class=\"elementor-element elementor-element-11c47044 e-flex e-con-boxed e-con e-parent\" data-id=\"11c47044\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-7a5ddffe elementor-widget elementor-widget-text-editor\" data-id=\"7a5ddffe\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t\n<p class=\"wp-block-paragraph\"><strong>Planning on investing in R&amp;D? Make sure you know about the tax relief you can claim before you start your next project.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/majjane.leyton.com\/uk\/r-and-d-tax-credits\/\">R&amp;D Tax Credits<\/a> help to drive growth and boost the UK economy, incentivising businesses by reducing the financial risk of innovation. This is why the UK Government has committed to maintaining the current level of support for the foreseeable future. In fact, the <a href=\"https:\/\/www.ciip.group.cam.ac.uk\/innovation\/uk-innovation-report-2025\/\">UK Innovation Report 2025<\/a> found that the UK offered the highest level of government-backed financial support for business R&amp;D (as a share of GDP) among OECD countries.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Because the relief can have a significant effect on cash flow and return on investment, it shouldn\u2019t be treated as an afterthought once projects are already underway. Taking the time to understand how the scheme works can really help to maximise your investment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why invest in R&amp;D?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">R&amp;D helps businesses maintain their competitive edge. Through R&amp;D, new products and services are developed or improved, processes and technologies are made more efficient and sustainable, and exciting breakthroughs are made that advance our overall scientific knowledge.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are also huge financial advantages to investing in R&amp;D. <a href=\"https:\/\/www.ukri.org\/wp-content\/uploads\/2025\/12\/IUK-221226-State-of-Innovation-2025-Summary-Report.pdf\">The State of Innovation 2025<\/a> found that innovative businesses reported an average sales growth of&nbsp;7%, much higher than the&nbsp;0.4%&nbsp;growth seen by those who weren\u2019t innovating.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How much tax relief is available to support R&amp;D investment? <\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Most profitable businesses, large or small, would claim through the <a href=\"https:\/\/majjane.leyton.com\/uk\/merged-rd-expenditure-credit\/\">merged R&amp;D expenditure credit scheme<\/a>:<\/p>\n\n\n\n<div class=\"wp-block-leyton-orion-block-list list-block undefined\"><div class=\"container\"><div class=\"row\"><div class=\"col\"><ul><li>The credit rate is\u00a020%\u00a0for all <a href=\"https:\/\/majjane.leyton.com\/uk\/insights\/articles\/what-qualifies-as-rd-expenditure-for-claiming-tax-relief\/\">eligible R&amp;D expenditure<\/a><\/li><li>This credit counts as trading income (so it is therefore subject to corporation tax)<\/li><li>If you\u2019re paying the main rate of 25%, the net benefit is 15%<\/li><li>If you\u2019re paying the small profits rate of 19%, the net benefit is 16.2%<\/li><\/ul><\/div><\/div><\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Loss-making, R&amp;D intensive SMEs can apply for <a href=\"https:\/\/majjane.leyton.com\/uk\/enhanced-rd-intensive-support-eris\/\">Enhanced R&amp;D Intensive Support (ERIS)<\/a> so long as their qualifying R&amp;D spend makes up at least 30% of the total expenditure.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">ERIS offers:<\/p>\n\n\n\n<div class=\"wp-block-leyton-orion-block-list list-block undefined\"><div class=\"container\"><div class=\"row\"><div class=\"col\"><ul><li>An additional\u00a086%\u00a0deduction on top of the normal 100% tax deduction for R&amp;D<\/li><li>A payable credit worth up to\u00a014.5%<\/li><\/ul><\/div><\/div><\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">What counts as R&amp;D for tax purposes? <\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Those who work on R&amp;D, such as engineers, developers and scientists, often don\u2019t realise that what they\u2019re doing is eligible R&amp;D in the eyes of HMRC. Instead, they think that their technical achievements are simply part of their job.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But where business innovation is concerned, it\u2019s always worth checking to see if your projects are eligible for relief. For tax purposes, R&amp;D occurs when a project seeks to achieve an advance in science or technology by resolving technical uncertainty.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This definition is more flexible than many businesses expect. R&amp;D doesn\u2019t have to take place in a laboratory, and it also doesn\u2019t need to involve groundbreaking discoveries. Many companies invest in qualifying R&amp;D simply as part of their normal efforts to improve products, services and internal processes.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What do we need to think about before our next R&amp;D investment? <\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Before you begin your research and development project, it\u2019s worth thinking about how you can maximise your R&amp;D investment. The best way to achieve this is by planning to make an R&amp;D claim from the outset.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Below, we list our tips for how you can proactively plan to maximise your R&amp;D Tax Credits claim:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Understand what really qualifies<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">We know from experience that businesses often underestimate their eligibility, assuming that only their most ambitious or \u201cheadline\u201d projects qualify. But in reality, many innovative activities, problem-solving efforts, and improvement projects can still fall within the scope of R&amp;D tax relief. Getting clarity early helps to make sure that valuable work isn\u2019t overlooked and that opportunities for claims aren\u2019t missed.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Think beyond individual projects<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Some companies initially approach R&amp;D claims on a project-by-project basis, only to later discover that their overall level of innovation is much broader. Taking a more holistic view of your R&amp;D activity can significantly increase the value of a claim and better reflect how innovation happens across your business.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Plan for documentation early<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Good R&amp;D claims rely on clear evidence of technical challenges and how they were addressed. The most successful businesses don\u2019t try to recreate this retrospectively. Instead, they build simple processes into their projects from the start, making it easier to support a claim in the event of an HMRC enquiry.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Factor tax relief into cash flow, not just year-end results<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Many businesses use R&amp;D Tax Credits to help to fund new hires, equipment, or the next phase of research and development. Understanding when relief is received and how it has an impact on cash flow can really help to influence the scale, timing and ambition of your R&amp;D investment.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Get the right support<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">R&amp;D tax relief rules are complex, and expert support can make a tangible difference. Not just in maximising a claim, but in giving businesses confidence that their claim is both robust and compliant.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Our team of experts can help translate your technical projects into clear, successful claims, allowing your teams to stay focused on what they do best: innovation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/majjane.leyton.com\/uk\/contact-us\/\">Get in touch<\/a> to find out more.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<div style=\"height:27px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><em><strong>If you enjoyed this article, you might also like:<\/strong><\/em><\/p>\n\n\n\n<div class=\"wp-block-leyton-orion-block-list list-block undefined\"><div class=\"container\"><div class=\"row\"><div class=\"col\"><ul><li><a href=\"https:\/\/majjane.leyton.com\/uk\/insights\/articles\/how-to-claim-rd-tax-credits-for-failed-research-and-development-projects\/\"><em>How to claim R&amp;D Tax Credits for failed research and development projects<\/em><\/a><\/li><li><a href=\"https:\/\/majjane.leyton.com\/uk\/insights\/articles\/how-to-avoid-some-of-the-most-common-errors-on-rd-tax-credits-claims\/\"><em>How to avoid some of the most common errors on R&amp;D Tax Credits claims<\/em><\/a><\/li><\/ul><\/div><\/div><\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Planning on investing in R&amp;D? Make sure you know about the tax relief you can claim before you start your next project. R&amp;D Tax Credits help to drive growth and boost the UK economy, incentivising businesses by reducing the financial risk of innovation. This is why the UK Government has committed to maintaining the current [&hellip;]<\/p>\n","protected":false},"author":157,"featured_media":1911,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[107,138],"tags":[528,532],"expertise":[],"class_list":["post-1834","article","type-article","status-publish","format-standard","has-post-thumbnail","hentry","category-business-update-en","category-rd-tax-credits","tag-hmrc-en","tag-rd-en"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.1 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What you need to know before your next R&amp;D investment\u00a0 - Leyton United Kingdom<\/title>\n<meta name=\"description\" content=\"Planning on investing in R&amp;D? Make sure you know about the tax relief you can claim before you start your next project. 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