R&D tax credits or relief can reduce your taxable profits and create or increase taxable losses, meaning less corporation tax is paid or the Government pays you in the form of tax credits. Almost 5,000 SMEs claim more than £250 million in tax relief every year.

There are two schemes: the large company scheme and the SME scheme. To apply for the latter a company must have fewer than 250 employees and either annual turnover not in excess of €50 million (around £34 million) or a balance sheet not exceeding €43 million (around £29 million).

See also: Millions in R&D tax relief overlooked by SMEs – Thousands of businesses are missing out on valuable tax breaks for research and development

An SME may be eligible to receive tax relief if it is doing something that involves having to develop scientific or technological knowledge that isn’t commonly available. This is the basic requirement but there are a variety of other criteria, on which the HMRC guide goes into detail. The relief is worth up to 15 per cent of eligible R&D costs.

To find out if your business is eligible and to download the guide, click here.