R&D tax credits are a fantastic way to support innovation, but not every business activity qualifies. Understanding these exclusions helps you make more informed decisions about which projects to prioritize. At Business Innovation Group, we specialize in helping businesses maximize their claims by focusing on eligible activities and avoiding costly pitfalls. Here’s a quick look at some non-qualifying areas that often cause confusion.
Routine Work and Maintenance
Many businesses conduct regular maintenance and updates as part of their standard operations. While these are vital, they aren’t eligible for R&D tax credits. Routine work includes activities like fixing existing systems, making small adjustments, or applying basic upgrades. R&D claims are focused on projects that drive genuine technological advancements, not on the everyday upkeep of systems or products.
Quality Control and Testing
Standard quality control and testing that maintain the functionality of an existing product don’t qualify as R&D. Only testing directly tied to the research and development of new technologies, materials, or processes is eligible. For instance, quality tests performed to ensure consistency don’t meet the requirements, but testing within a project to overcome technical uncertainties may be.
Business Operations and Non-Scientific Fields
Expenses and activities related to sales, marketing, administrative tasks, and general business operations aren’t eligible for R&D tax credits. Furthermore, work that doesn’t aim to overcome scientific or technological challenges, like projects in social sciences or humanities, is generally ineligible.
How Business Innovation Group Can Help
Our expert team ensures your R&D tax credit claim is comprehensive and focused on the right areas. We help you identify activities that meet HMRC’s requirements and guide you away from non-qualifying expenses, maximizing your claim’s potential and reducing the risk of costly rejections. If you’re unsure whether a project qualifies, reach out to us. We’re here to streamline your claims process and help you focus on the innovations that make a difference!
