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Is It Worth Getting a Patent in the UK?

ben.guyton@wilbyjones.co.uk (Ben Guyton) — Thu, 23 Jul 2026 15:27:48 GMT

Patents are a powerful tool for protecting your intellectual property (IP). They give you the legal right to prevent others from making, using, or selling your invention without permission. But before you can secure a patent, your invention must meet specific criteria, something many businesses find confusing. Understanding the difference between what can and cannot be patented is crucial. Here’s a detailed breakdown.

Do you make money from a patent?

The value of a patent largely depends on how it’s used. If you actively commercialise the invention, enforce your rights, or leverage it in commercial negotiations, then it can generate substantial income. Many businesses earn royalties by licensing their patented product, while others use it to increase the valuation of their business or block competitors out of their market to fully capitalise.

While global giants like Philips have over 50,000 patents earning them millions, SMEs can also generate substantial revenue. Lumora’s patented DNA testing technology led to a very lucrative deal worth millions which may not have been possible with out patenting their invention. However, research suggests that only 5% of patents generate money, which proves its the strategy behind the patent that’s key to success. Companies can get caught out by targeting niche markets with limited demand, filing without a commercial plan, or underestimating the cost of maintaining a patent. Securing your patent is only the first step. To capitalise on your innovation, you need a clear, well-executed strategy in place.

How many patents are worthless?

Successfully generating revenue from a patent can be a challenging prospect. In fact, research shows that roughly 97% of all patents never recoup the cost of filing them. This is often due to several factors:

No commercial use

The invention may be clever, but if there’s no option to apply it in the real world or it lacks market demand, there is little opportunity for revenue.

Filed too early

A patent without a proven business model might deter investors and reduce chances of investment.

Too narrow or too broad

If a patent is too narrow, it’s easy to design around and companies may alter a couple of aspects of your invention to bring an alternative to market. By contrast, if your claims are too broad, you patent may be invalidated for lack of inventive step.

No budget for enforcement

Maintaining a patent can be costly as the UK requires annual fees which increase over time. Additional costs could be incurred by using patent attorney or specialised patent services.

Can you lose a patent if you don’t use it?

While you generally won’t lose a patent through lack of use, there are situations where it can create issues. Failure to pay renewal fees will cause a patent to lapse, meaning it will expire prematurely. Additionally, certain jurisdictions may allow compulsory licensing if a patent is not being used or licensed to meet public demand. For instance, if you’ve patented a life-saving medical device but you’re not producing it or allowing others to license it, a competitor could petition for the right to use that patent in the public interest.

To avoid any chance of losing your invention, the best approach is to commercialise your patent. By licensing it, enforcing it, and combining it with R&D tax credits and the Patent Box scheme, you can maximise financial return.

What are the benefits of having a patent?

Legal protection for your invention

Once your patent is granted, it’s published and legally enforceable, meaning if someone tries to copy or commercially exploit your invention, you can take legal action against them. This legal protection means you can stop them or claim any damages inflicted on your company. A patent also discourages competitors from entering your market and if they do, you’ve got legal grounds to fight back. However, the existence of a patent doesn’t automatically stop infringement. As the patent holder, you are responsible for monitoring the market and enforcing your rights. For instance, Kodak held key patents around digital image capture but didn’t enforce them for years. When they finally did, the market had already moved on, and enforcement was far more difficult and less lucrative.

Licensing your patent to earn royalties

Licensing your patent allows you to earn royalties by granting others the right to use, make, or sell your invention without having to commercialise it yourself. You can structure the licence as exclusive which means one licensee has sole rights to use the patent. An exclusive license provides an opportunity for higher royalties, but you lose flexibility over your patent. Another route is a non-exclusive license, which allows you to grant rights to multiple companies. You can gain more reach but you’ll have less control over your patent. A well-drafted licensing agreement will set out the terms, which includes rights, restrictions and payment structure. With the right partner and legal safeguards, licensing can turn your patent into a reliable revenue stream while you focus on innovation.

Increased investor confidence

Patenting your invention shows investors that your business has something legally protected, making it a far more attractive investment. It shows you’ve taken steps to safeguard your innovation, making it harder for competitors to replicate your invention. Investors will recognise this as a way to secure your market position and improve credibility. A granted patent also adds tangible value to your balance sheet and can be licensed or sold, offering investors clear return on investment (ROI). It also reflects strategic thinking and long-term planning which is exactly the kind of foresight that builds investor confidence.

Accessing Government incentives

Combining Patent Box with R&D tax relief can be highly effective. Companies invest in R&D activities, reducing their tax liability through R&D tax relief. The financial benefit not only offsets the cost of innovation but also reinforces R&D as a critical component of long-term value creation and corporate strategy

By effectively combining these incentives, companies can:

Enhance cash flow and profitability

Reinvest savings into further R&D activities

Strengthen their competitive position in the market

When these government schemes are used together, they have the potential to fund innovation and business growth.

The verdict: is it worth it?

A patent alone cannot guarantee income and business growth. Its success is often determined by how it’s utilised. When commercialised and supported by Patent Box, a patent can deliver significant financial returns.

However, companies should carefully consider the reality that most patents fail to generate revenue. This is not down to a poor invention, but the lack of an effective plan to exploit their patent. Be wary of poor market fit, lack of enforcement and failure to integrate IP into your overall growth strategy, which can all make patents worthless. However, it’s worth noting that some people get a patent to simply protect their idea and not make profit. The reality is that most people will go through the hard work of acquiring a patent and want a return.

If you’re considering pursuing a patent, make sure you gave reviewed these factors before moving forwards. Only then will you see a return on your innovation.

The Patent Box Scheme and its Role in R&D Growth

ben.guyton@wilbyjones.co.uk (Ben Guyton) — Thu, 23 Jul 2026 15:27:47 GMT

The Patent Box scheme, introduced in the UK on April 1, 2013, epitomises the government’s strategy to stimulate innovation through fiscal incentives. This initiative offers companies a reduced corporate tax rate of 10% on profits derived from patented inventions, encouraging the country’s intellectual property retention and commercialisation.

Initial Intentions and Challenges

The Patent Box scheme was initially designed to enhance the UK’s appeal as a hub for innovation by offering a reduced 10% corporate tax rate on profits from patented inventions. This incentive aimed to encourage companies to develop and retain their innovations domestically. However, the scheme’s broad eligibility criteria soon attracted criticism for potentially enabling tax avoidance rather than stimulating genuine economic activity.

Critics argued that the lenient requirements disproportionately benefited large multinational corporations, enabling them to exploit tax benefits without significantly increasing their R&D spending in the UK. This mismatch highlighted the need for tighter regulation to ensure that the scheme effectively fosters real investment in domestic innovation rather than merely offering tax savings for well-established firms.

Reforms and Alignment with International Standards

In response to the criticism and to align with OECD standards, the UK’s Patent Box scheme underwent significant reforms in 2016, adopting the “nexus approach.” This approach requires that tax benefits be directly linked to R&D expenditures incurred within the UK, ensuring that fiscal advantages are awarded only to companies genuinely investing in local R&D. This shift aimed to prevent profit shifting by multinational corporations and ensure that the scheme’s tax incentives directly stimulated domestic innovation.

The nexus approach ties the tax benefits to the proportion of a company’s R&D spending in the UK, promoting a fairer distribution of incentives and supporting smaller businesses and startups alongside larger enterprises. A transitional period until June 2021 allowed companies to adjust to the new requirements, with UK tax authorities guiding to facilitate compliance.

Transition Period and Compliance

The UK government instituted a transitional period that extended until June 2021 to facilitate a smooth transition to the reformed Patent Box scheme. This period was designed to give companies adequate time to adjust to the stricter requirements introduced by the nexus approach. It was important to ensure businesses could seamlessly integrate their existing patent claims with the new compliance standards that now demanded a direct linkage between tax benefits and R&D expenditures within the UK.

During this transitional phase, companies had to make significant adjustments in their operational and accounting practices. They were encouraged to enhance their systems for documenting and tracking R&D activities directly contributing to patented products or innovations. This was crucial for demonstrating compliance with the new rules, as only those R&D activities verifiably conducted in the UK would qualify for the scheme’s tax advantages.

The transitional period served as a buffer to help companies reevaluate their strategic approaches to innovation and taxation. The UK tax authorities provided guidance and support during this time, offering workshops, detailed guidelines, and direct consultations to help companies understand the nuances of the new system and the importance of maintaining robust documentation. This support was aimed at promoting high compliance and ensuring that companies could effectively align their R&D investments with the scheme’s revised objectives, fostering a culture of genuine innovation within the UK’s economic landscape.

Impact and Uptake Across Sectors

Despite facing initial challenges and implementing stricter regulations, the Patent Box scheme continued to see strong uptake across various sectors. By the fiscal year 2016/17, there was a significant increase in claims, particularly from large manufacturing enterprises, highlighting the scheme’s effectiveness in promoting a competitive innovation landscape. The trend of increasing engagement was consistent, and by the 2018/19 fiscal period, the scheme had attracted over 1,400 companies.

This broad participation underscores the scheme’s appeal and success in supporting technological advancements through patents. The continued popularity of the Patent Box reflects its importance as a strategic tool for fostering innovation and maintaining a vibrant, technology-driven economy in the UK.

Recent Trends and Future Outlook

The latest data from HMRC for the 2020/21 fiscal year reveals that the Patent Box scheme continues expanding its reach, benefiting diverse industries. This sustained growth highlights the scheme’s effectiveness as a catalyst for innovation and economic development. The Patent Box successfully aligns corporate R&D investments with broader national economic goals, fostering an environment where innovative activities contribute significantly to the UK’s economic vitality. This trend suggests that the scheme will continue to play a crucial role in driving sector-wide advancements and supporting the UK’s strategic economic objectives.

Driving Innovation in the UK

The UK’s Patent Box scheme has evolved from a broadly applicable tax incentive into a well-regulated framework, demonstrating the government’s commitment to nurturing an innovative, forward-looking economy. This evolution reflects a mature policy environment where fiscal tools are strategically employed to enhance substantive economic activities.

Thinking about claiming R&D tax credits?

R&D tax credits offer a significant financial benefit in promoting innovation across industries. It pays to consult with an expert, and we can provide bespoke advice and support to manage your claims process quickly and effectively. Contact our team today.

5 Reasons Why SMEs Are Claiming R&D Tax Relief But Not Patent Box

ben.guyton@wilbyjones.co.uk (Ben Guyton) — Thu, 23 Jul 2026 15:27:44 GMT

Since July 2021, a new rule has been introduced to the Patent Box scheme specifying that companies must show a direct connection between the research and development (R&D) activities that led to their qualifying patents. Yet in the 2022-23 tax year, 65,000 companies made an R&D tax relief claim compared to only 1,600 companies claiming Patent Box, despite over 22,000 patents being granted during the same period.

So, why is there such a huge divide between the number of companies claiming R&D tax relief and those claiming Patent Box? There are six main factors that could explain this.

1. Focusing on the upfront cost, rather than the potential benefits.

Not all patents are created equal, and the complexity of your invention can greatly influence the overall cost. Because of this, fees can vary anywhere from £350 to beyond £10,000 for initial filing, examination, and search costs. For a more detailed breakdown, see our article: How Much Does a Patent Cost in the UK?

It is important to understand the costs associated with patenting in the UK and weighing these against the benefits of the Patent Box scheme. Profits from patents are taxed at an effective rate of 10% compared to the standard UK corporation tax rate of 25%, resulting in a tax saving of up to 15% every year qualifying profits are generated from patents. By planning ahead, leveraging professional expertise, and considering all aspects of the patenting process, you can make informed decisions that support the long-term success of your business.

2. Uncertainty regarding the workings of the scheme.

To be eligible for Patent Box, your company must own or exclusively licence a patented product or process and must actively be involved in its development. The scheme applies to specific profits directly attributable to the patented innovation; not all income will benefit from the reduced tax rate. It can be complex to calculate this, but the benefits can be substantial, and a qualified Patent Box advisor will be able to help you understand your potential tax savings.

3. Misconception that patents are solely about protection.

Many companies are under the impression they will not require a patent for their innovations if they do not plan on suing competitors. While this is a great method of protecting intellectual property (IP), patents can also provide significant value through factors such as competitive advantage, revenue generation and brand perception.

Owning patented products or processes creates eligibility to the Patent Box scheme, which can enable your company to pay a reduced rate of 10% Corporation Tax. To find out more, see our article: Understanding the UK Patent Box Scheme.

4. Lack of awareness for what can be patented, and the Patent Box scheme in general.

Similar to the R&D tax relief scheme, clients often underestimate what they achieve every day. For patent eligibility, you must have IP which is novel, inventive and capable of industrial application. Constantly reviewing your patent process can uncover areas which you may not have initially realised are eligible for the scheme. Believing the process to create a patent is time-consuming and complex.

The process of applying for a patent typically involves checking your invention has not already been patented or disclosed, preparing a detailed description of your invention and supplying any necessary drawings or documentation to support your claim. You must also submit your application to the Intellectual Property Office (IPO), paying fees for a search by the IPO and a substantive examination to determine if your invention merits a patent, and waiting for grant or refusal of the claim.

This application process can be streamlined by utilising a qualified patent attorney, who can leverage their expertise to prepare and file the application on your behalf, help you to avoid costly mistakes, and ensuring your patent is robust enough to withstand challenges. This process can typically take between 2-4 years, but profits earned while a patent is pending can be claimed up to six years prior to the patent being granted.

5. Lack of guidance from professional advisors.

As patent applications must demonstrate a direct connection between the research and development (R&D) activities that led to their innovations, claiming R&D tax relief is a good indicator of a company’s potential for a Patent Box claim. Advisors should have the specialist knowledge required to assess and identify Patent Box eligibility and open discussions with their clients to spread awareness of this scheme.

While thousands of UK companies are capitalising on R&D tax relief, only a small fraction are accessing the additional, and often substantial, benefits of the Patent Box scheme. With the right guidance and a clear understanding of Patent Box, many businesses may find they’re far closer to qualifying than they realise. Find out more about our Patent Box service or get in touch today to speak to one of our expert advisors.

R&D tax relief for brewers and distilleries

ben.thompson@wilbyjones.co.uk (Ben Thompson) — Thu, 23 Jul 2026 15:27:42 GMT

Like many other businesses in the food and drink industry, alcohol manufacturers may have cause to benefit from HMRC’s R&D tax relief incentive. This article explains everything you need to know…

What is R&D tax relief?

R&D tax relief is a statutory tax relief scheme implemented by HMRC. Businesses that can prove that they have spent money on certain ‘qualifying costs’ in the course of research and development can obtain a reduction on their annual corporation tax bill.

HMRC has a very specific definition of what counts as R&D. The project must overcome technical uncertainty to advance knowledge in its field. The element of uncertainty is important, and the solution cannot be easily deductible by a competent professional. You can find out more about HMRC’s definition of R&D here.

The qualifying costs that businesses can claim for are specific, too. These must be expenses accrued during R&D, and can include:

Employee costs (such as salaries, National Insurance contributions, and pensions)
Subcontractor costs
Software
Consumable items: materials, utilities
Clinical trials.

To make an R&D tax relief claim, brewers and distillers must be able to prove exactly how much was spent on the above categories and prove timescales for the project.

How much R&D relief a business is eligible for depends on its qualifying R&D spend and company size.

SMEs can deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction
Larger companies may be eligible for a tax credit worth 12% of the company’s qualifying R&D expenditure.

Why is R&D tax relief relevant for breweries and distilleries?

R&D happens as part of projects conducted by normal businesses, breweries and distillers are always on the lookout for ways to make their products better for their customers. Whenever this happens, there will usually be a period of research and development at the start of the project lifecycle. For example, before a business can start distilling a new variety of whisky, there will necessarily be a period of planning, research, and testing. If this research and development helps a company advance a new area of knowledge in its field, this falls under HMRC’s definition of R&D.

Are there any restrictions on the type of business that can claim R&D tax relief?

Due to the strict industry regulation that alcohol manufacturers face, brewers and distillers often think they’re not eligible for R&D tax relief. However, we’re pleased to say that this isn’t the case.

Businesses from any sector can apply for R&D tax relief as long as they pay UK corporation tax, and the work meets HMRC’s definition of research and development. This is because R&D is judged on a project-by-project basis, not on a business-by-business basis. This also means that not all a company’s work will involve R&D. An experienced R&D tax relief consultancy will be able to provide clear advice on what projects are covered, and what’s not.

What is the purpose of the R&D tax relief scheme?

R&D tax relief exists to reward businesses for spending money on research and development. It’s a risky business and it doesn’t always result in a successful outcome. Projects may be delayed, or fail totally, costing the business money.

HMRC uses R&D tax relief to reward businesses for taking this risk, and to encourage them to keep doing it. No matter what the sector, R&D and innovation are good for the economy, which is why HMRC wants businesses to do more of it.

What types of R&D might brewers and distillers do?

When it comes to R&D activity relevant to brewers and distillers, the scope is broad enough to encompass many potential projects.

Here are some examples of the types of R&D projects that may be undertaken by brewers and distillers:

Using alternative ingredients and creating new flavours
Improving the distilling or brewing process, such as making it faster or possible on a larger scale
Increasing or reducing the alcohol content without affecting the flavour
Creating healthier versions of products, such as lower-calorie, reduced-sugar, or gluten-free
Making a product more sustainable or environmentally friendly, or reducing its waste by-products
Inventing totally new types of alcohol

How do brewers and distillers make an R&D tax relief claim?

Even though R&D tax relief is technically a form of tax self-assessment, businesses rarely do it this way. Most choose to work with an experienced R&D consultant who can advise and support them through the process.

Although other R&D tax relief firms may have their own way of doing things, here’s how we do it at Wilby Jones Consulting:

Introductory call: we’ll spend some time getting to know your brewery or distillery. We want to ensure the working relationship is right for both parties.
Working meeting: We’ll spend 2-3 hours discussing past projects with you. We’ll ask you to discuss your work in detail, so we can identify the elements of R&D.
Transfer of information: We will need things like invoices and timesheets to prepare the claim for HMRC, as well as the exact date the project started and ended.
Creating and submitting the report: Once we have all the relevant information, we’ll prepare the report on your behalf. We’ll get you to look through the report and provide sign-off before we submit it.
Aftercare: We’ll be on hand to support you after your claim, responding to any queries from HMRC and working with you to prepare any future R&D relief claims.

Want to find out more about how your brewery or distilling business could benefit from R&D tax relief?

Get in touch to discuss your projects in more detail.

Tidal Defences That Preserve Marine Ecology

dene.smart@wilbyjones.co.uk (Dene Smart) — Thu, 23 Jul 2026 15:27:09 GMT

Typically, seawalls are constructed using reinforced concrete panels which provide important structural reinforcement to marine structures, however, can be detrimental to marine biodiversity. The concrete on the surface of the panels can be toxic to marine life, including microorganisms, which can result in disruptions to the ecosystem.

Based on a global research project on the relationship between habitat complexity and marine biodiversity on human-built marine structures, our client undertook further investigation with the aim of developing a unique eco-engineered wall tile that can be used to increase the biodiversity of sea walls. The project’s design phase took place throughout the 2020 financial year followed by its successful implementation in the South of England in 2021.

In order to develop the panels, our client worked alongside various specialists to construct several sample panels for use on British sea walls. During the development of prototypes, the environmental impact of these products was considered including the potential contamination or pollution of existing ecosystems, as well as the management of waste from installation and general use of the products.
Once the panels were developed, they then had to be installed along the coastline which presented a significantly complex construction environment because of tidal patterns and unpredictable ground conditions. To ensure that all necessary work was completed before the tide came in, an increased labour force was used under a unique scheduling methodology that completed work before progress was lost to the rising tide.

The result of the project was the successful implementation of the world’s first tidal defence system capable of supporting a live ecosystem and retaining sea life in areas with costal defences despite challenges resulting from the extreme site conditions. Methods used on the design and implementation of this system can be studied and repeated to project coastal ecosystems globally.

Wilby Jones worked with the client to capture their innovative approach for the preservation of marine ecology, with the project spanning a two-year period. Consequently, two R&D tax claims were submitted to HMRC which resulted in appropriate compensation for future development and furtherment of projects encompassing the natural world.

What is Innovate UK?

Dawn Hargy-Lowden — Thu, 23 Jul 2026 15:27:09 GMT

Innovate UK, the UK’s national innovation agency, fuels business growth by funding and supporting the creation of new products and services. As a government-backed body within UK Research and Innovation, it’s led by experts across various fields to drive innovation nationwide.

How do I get an Innovate UK grant? 

To get an Innovate UK grant, you can apply to one of their innovation competitions which can be found on GOV.UK. But before you do this, ask yourself five questions so you know you’re ready:

Is there a big enough market for your innovation? Ask yourself, are there enough people who will benefit from my product or service?
Is it world leading? Is your idea making a significant leap forward or is it only a minor change?
Is it at the right stage of development? If you were given the green light tomorrow, could you hit the ground running and make significant returns?
Does the idea benefit wider society? Why should public money be used? You should highlight how the idea benefits the economy, society and the environment.
Are you the right person? Do you have the expertise, the team and the experience to commercialise your idea?

If you answered yes to all of these, you’re ready to go. So here are the next steps:

Eligibility

Are you eligible for the contest and does your project fit the scope? You must be a UK-registered business or a research and technology organisation. You must also intend to commercialise the results in the UK. 

Contest criteria

Each contest has a specific set of criteria which must be met. From number of collaborations on a project, to location of the project work, understanding the criteria before application is critical.  You might need a collaborator or partner so by reaching out to Innovate UK, they can help you match with a partner organisation.

Registration

Get registered for webinars where you can talk to the funders, ask questions, and meet other organisations.

Funding

Ring fence potential match funding as most contests require at least 30% match funding from the company. Innovate will pay the other 70%, so making sure you finance your portion of the grant is critical.

Support

Read the documentation and application on Innovate UK’s website and give yourself plenty of time. There are a great deal of appendices which must be added to your application so ensure you allocate enough time.

Budget

Sit down with your team and understand what your budget might be and how it fits with the grant criteria.

Innovate UK have a range of grants available from biomedical, to technology, agriculture to marine, but perhaps their most popular grant is the Smart Grant. Open on a rolling basis at multiple times during the year, the Smart Grant is Innovate UK’s ‘catch all’ technology grant. It’s designed to include as many companies as possible.

Do I Qualify for Innovate UK Smart Grants?

Smart Grants are a way to support brand new and high impact innovations from micro, small and medium-sized enterprises (SMEs). UK registered organisations can apply for grants varying from £100k to £2m. Innovate UK Smart Grant accepts applications for funding all year round, with specific deadlines every quarter. If you’re looking to enter, here’s a few things you should know:

Your project must:

Start by 1st April 2025
End by 31st March 2027
Include at least one micro, small or medium enterprise (SME) as the lead or a collaborative grant claiming partner
Follow specific rules depending on its duration
Carry out all of its project work in the UK
Intend to exploit the results from or in the UK

The concept must be a ground-breaking and innovative idea for brand new product or services. The idea should be notably different from products and services already on the market that is set for rapid commercialisation following project completion.

What is the Success Rate of Innovate UK Smart Grants?

Innovate UK’s Smart Grant is the most popular grant they offer and as a result is heavily contested. This explains the very low funding rate.

If you want to improve your chances, here are a few tips which will help:

Ensure your project is truly innovative, not just a minor change.
Know the market. Who are your competitors and where do you fit in with the rest of the market?
Understand your weaknesses as well as your strengths. Smart Grant is for innovation, so these projects won’t come without their risks.
If you need support it’s worth hiring someone to help. A critical pair of eyes is important.
Don’t give up. Most people who go on to win Smart Grants don’t get it on their first application. The second application often responds to the feedback and wins the grant, so don’t be downhearted.

The Importance of an Innovation Ecosystem

Innovate UK plays a critical role as an anchor funder within the ecosystem, providing vital financial support. This partnership enhances the development of new technologies and solutions, contributing to the UK’s competitive advantage. Innovate UK funds new innovations that are too risky for traditional funders. Public money is used to boost UK Public Limited Companies and position the UK at the forefront of emerging technologies. Support can also be given to businesses as they move into international markets.

Innovate UK’s Mission

Innovate UK’s mission is to fund companies at the early stages of their development so they can bring innovative products to market. This allows the organisation to stay ahead of international innovation standards. Ultimately, it’s public taxpayers’ money coming through the government to Innovate UK, so they want to get the money back in taxes and profits. Innovate UK also goes beyond funding, ensuring companies find the right partners to access the right expertise and equipment. It not only supports domestic innovation but also helps UK businesses explore international markets, reinforcing the UK’s position as a global leader in innovation.

Recording studio interference

ben.thompson@wilbyjones.co.uk (Ben Thompson) — Thu, 23 Jul 2026 15:27:06 GMT

Our client, a company specialising in the design, build and installation of bespoke recording studios, have been leaders in innovation of in their sector since 2005.

One of their recent projects presented some unique challenges which required an innovative touch to tackle. A recording studio was to be built in the heart of London, and as the project was underway and testing began on the audio equipment, an unfortunate problem occurred. During playback of the recordings an unusual interference was noticeably present, rendering any recordings unusable. Our client were tasked with investigating this problem and developing a solution to overcome it.

The studio was located above an active underground railway line, and during the build of the studio, a key design focus was ensuring the studio was completely soundproof so as to not affect the artists. This is standard practice. However, a much more unique problem was also present. The high voltage electricity distribution lines used by the mainline railway were inducing an electromagnetic field, caused by the rapid acceleration of electrical particles through the lines. This invisible force was the source of the interference with the sensitive audio equipment in the studio above.

To overcome this our client devised a plan to build a Faraday cage, around the entire 18-room facility containing the studio. A Faraday cage is an enclosure made of conductive metal that is used to block electromagnetic fields, invented back in 1836 by renowned scientist Michael Faraday. The cage built by our client represented the first use of one this size and in this setting in the UK, pushing the boundaries of what has been done before.

We were able to work with the client to identify the baseline of knowledge in both the sector and within their own company on a project by project basis to assess the levels of R&D on each project. This led to a successful claim based on the new and innovative solutions our client developed.

R&D tax relief for engineering firms

ben.thompson@wilbyjones.co.uk (Ben Thompson) — Thu, 23 Jul 2026 15:27:04 GMT

Welcome to Wilby Jones guide to R&D tax relief for engineers.

Although we support businesses from many sectors with their tax relief claims, we’re specialists when it comes to R&D relief for engineering firms. This means we’re able to give you advice that’s tailored to your business.

Our engineering clients are able to simply tell us about their projects, in their own words and technical terminology, and we identify which elements of their work is eligible for an R&D claim.

This guide will cover all the key areas relating to R&D tax relief for engineers, including:

What is R&D tax relief?
Why is R&D tax relief relevant for engineering firms?
Why does HMRC reward engineers for R&D?
What R&D costs are covered?
How do engineering firms make an R&D relief claim?
Engineering client case study

What is R&D tax relief?

R&D tax relief is a statutory tax relief scheme operated by HMRC. Businesses that can prove they have conducted research and development are eligible for a reduction in their annual corporation tax bill.

In order to claim R&D tax relief, you must be able to prove exactly how much your firm spent on R&D, broken down into exact costs (materials, staff costs, etc). This is because only certain expenses qualify as R&D spend.

Although research and development may sound broad, HMRC’s definition is quite narrow. R&D is a specific part of a project lifecycle; usually conducted before any construction or development takes place. HMRC will expect to see how a project overcame a technical uncertainty in order to advance knowledge or understanding in its field.

How much R&D relief your firm is eligible for depends on how much you spent on qualifying R&D costs, as well as the size of your business.

SMEs can deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction
Larger companies may be eligible for a tax credit worth 12% of the company’s qualifying R&D expenditure

You may claim retroactive tax credits for qualifying costs from the last two years, as well as a reduction on future corporation tax returns.

Why is R&D tax relief relevant for engineering firms?

Simply put, the nature of engineering means that many firms are likely to conduct R&D work without realising. A lot of engineering work involves overcoming technical uncertainty, which means that engineering firms are the perfect candidate for R&D tax relief.

Here are some examples of the types of engineering projects that may qualify:

Exploring alternative materials
Improving safety, cost-effectiveness, or reliability
Sustainability, waste management, and reducing pollution
Prototyping
Improving engineering processes
Production at scale

Although engineering firms are a great candidate for this scheme, businesses from any sector can claim R&D tax relief. That’s because R&D is about the work you do and not the business that does it.

In other words, the R&D tax relief scheme can benefit firms from any of the engineering subsectors. Whether your firm works in aerospace, petrochemical, geotechnical, or electrical engineering, if your R&D work is innovative, you may be eligible.

Why does HMRC want to reward engineers for R&D?

The R&D tax relief scheme exists as a reward: HMRC wants to thank firms for conducting research and development and to encourage them to keep doing it. The scheme also acknowledges that innovation involves a certain amount of risk-taking. Innovators don’t always get it right first time, which is why even unsuccessful projects may be eligible for the R&D relief scheme.

HMRC wants to ensure businesses keep doing R&D because the innovation it generates is good for the economy. In particular, since the Industrial Revolution, the UK’s capacity for engineering excellence has been a vital factor in the country’s economic success. In fact, in 2018, the engineering sector generated 21.4% (£1.2 trillion) of the UK’s £5.7 trillion turnover.

What R&D costs are covered?

HMRC requires all businesses to pay corporation tax on their profits: that is, income minus any expenses. R&D costs are already a business expense, so the R&D tax relief scheme in effect allows businesses to claim an extra reduction on their tax.

In order to calculate how much to reduce from your corporation tax bill, HMRC needs to know exactly how much your firm spent on R&D. However, not all R&D costs qualify for the relief scheme.

The following costs are eligible:

Employee costs: salaries, National Insurance contributions, pensions
Subcontractor costs
Software
Consumable items: materials, utilities
Clinical trials

However, these costs don’t qualify:

The production and distribution of goods and services
Capital expenditure
The cost of land
The cost of patents and trademarks
Rent or rates

How can engineering firms make an R&D relief claim?

The first step is to choose an expert R&D advice firm to support you with your tax relief claim. Your chosen R&D tax relief firm should have a good working knowledge of your sector and the type of work you do. They don’t need to be engineers, but they should understand the specifics of your projects. For more information about choosing an R&D advice firm, check out our online guide.

Once you’ve chosen your R&D tax relief firm, the claim process should look like this:

Introductory call: your new R&D tax relief adviser should spend some time getting to know your business, ensuring the working relationship is right for both parties.
On-site working meeting: Your R&D firm will take 2-3 hours discussing past projects with you. They’ll ask you to discuss your work in detail, so they can identify the elements of R&D. Most R&D firms do this face-to-face, but some will do this via Zoom (especially at the moment).
Transfer of information: Your R&D firm will need things like invoices and timesheets to prepare the claim for HMRC. They’ll also need to know the exact date the project started and ended.
Creating and submitting the report: Once your R&D adviser has all the relevant information, they will prepare the report on your behalf. They should request sign-off from you before submitting to HMRC.
Aftercare: A good R&D advice firm will be on hand to support you after your claim, responding to any queries from HMRC and working with you to prepare any future R&D relief claims.

Want to find out more about how we support engineers with their R&D tax relief claims?

Get in touch.

Claiming Research & Development Tax Relief

amy.johns@wilbyjones.co.uk (Amy Johns) — Thu, 23 Jul 2026 15:25:23 GMT

The UK government offers Research and Development (R&D) reliefs. These tax credits support businesses that work on innovative projects in science and technology.

It can be claimed by a range of companies that seek to research or develop an advance in their field. It can even be claimed on unsuccessful projects. You may be able to claim Corporation Tax relief if your project meets our definition of R&D.

R&D activity

Your research work to count as R&D relief must form a part of a project that makes an advance in science or technology. The work could be part of your daily routines or could be a specific project started with the intention of further science and/or technology.

To get R&D relief you need to explain how a project (and we quote from the gov. website)

looked for an advance in science and technology
had to overcome uncertainty
tried to overcome this uncertainty
could not be easily worked out by a professional in the field

Your project may research or develop a new process, product or service or improve on an existing one.

R&D spend

R&D is an expense based relief, this means that you are able to claim the cost to the company on a qualifying part of a project. This is important and shouldn’t be confused with employee charge out rates, which are often higher and include compensation for overheads. The costs you can claim include wages, sub-contractor costs, some materials, software, light and heat and any other relevant expenses incurred in the pursuit of a technological or scientific advance.

Capturing R&D cost is a big area in which companies need assistance. The easiest way is to implement timesheets or project tracking tools to show who worked on which projects, however, work should be done on an individual basis to create a plan which captures costs best for each company.

You must show there was uncertainty

Showing there was a technical uncertainty is absolutely vital to claiming RD tax relief or tax credits. It is an area which causes some confusion as how can you prove that something was uncertain to the entire sector? HMRC guidance helps to clear this up with one of their mantras ‘relevant R&D will occur when an uncertainty arises where the answer is not readily deducible to a competent professional’.

If you are in a directorship or management position within a company with experience and/or qualifications in that area then you are deemed to be a competent professional – therefore, if the answer is not easily defined by you, your peers or via quick research into the subject then it is very likely that a technical uncertainty exists.

Explain how you tried to overcome the uncertainty

Clearly, you should exemplify that the R&D needed research, testing and analysis. The best way to do this is to approach projects in a methodical and recorded way. What HMRC need to see is the process that a company goes through in order to achieve an advance. For example, a project that goes through several iterations, requires testing and is adapted throughout is more likely to be seen as an R&D project than a product which is developed in a very short window and worked perfectly first time. This is not to say that R&D projects can’t complete at the first attempt, but a string of these could indicate low levels of R&D.

Research and Development SME Scheme

The most common R&D relief claimed by small and medium companies in the UK is tax relief and tax credits. The costs associated with an R&D claim are enhanced by a further 130% and this number is then reapplied to a companies tax return as extra costs.

This can then do one of a few things:

Reduce the taxable profit – if a company makes good profits and the R&D enhanced expenditure is less than the profits shown then the end result will be a reduction in corporation tax payable or, if looking at a past period, a repayment of overpaid corporation tax
Create a taxable loss – if the R&D enhanced expenditure is more than the companies profit then this will create a taxable loss position. In this instance the company can either carry that loss forward to use against future profits with a benefit of (currently) 19% OR they can opt to surrender that loss to HMRC and be paid a tax credit at 14.5%.

Any SME can qualify for this scheme as long as they undertake relevant R&D work and are under the limits for qualification as an SME.

Research and Development Expenditure Credit

Large companies can claim a Research and Development Expenditure Credit (RDEC) for working on R&D projects.

It can also be claimed by SMEs and large companies who have been subcontracted to do R&D work by a large company.

The RDEC is a tax credit, it was 11% of your qualifying R&D expenditure up to 31 December 2017. It was increased to:

12% from 1 January 2018 to 31 March 2020
13% from 1 April 2020

If you’d like to know more about claiming R&D tax credits, contact Simon today.

3D Scanning Techniques for Nuclear Decommissioning

Jack.tovee@wilbyjones.co.uk (Jack Tovee) — Thu, 23 Jul 2026 15:25:21 GMT

Our client was appointed to create a specialist remote 3D laser scanning method for use on a contaminated site at a former nuclear facility. The main objective of the project was to make a scan of the building to internally survey the main cell to enable a 3D model of the internal cell configuration to be generated. This would allow the company to upgrade, and process used fuel offsite safely.

Due to the implications of working on a nuclear site and in order to meet the requirements of the project under strict environmental and personnel constraints, the scan needed to be carried out remotely which required taking an unusual approach to 3D scanning as conventional techniques of scanning would be unsuitable. It was essential that the building’s extract ventilation, air monitors and cell extract ventilation was monitored to detect failure, in which case work would need to stop immediately.

The project was challenging to achieve a method of taking the scan remotely through the roof port to mitigate the risk caused by background radiation. The area was designated as having a moderate level of contamination and low level of radiation. As a consequence, it was a pre-requisite that all personnel carrying out the activities had to be classified workers with electronic personal dosimeters. This would allow for the detection and display of the continued dose rate and cumulative dose of the penetrating and no-penetrating radiation.

To ensure the 3D scan could be made safely and successfully, they had to develop a technique that would allow the scan to be carried out by classified workers without the necessity of having prior experience in the field. To meet these criteria, the team were required to develop a completely novel method of scanning that would allow the access site to be heavily monitored for contamination and be easily carried out under the supervision of the engineers.

A PVC area was set up at the roof port of the cell, with an Activity in Air Monitor (AAM) located within the barriered area and a second AAM was positioned outside the area. Each AAM was set to alarm at 5DACh alpha and 1 DACh beta. This allowed the team to monitor the conditions within and outside of the cell to detect radioactive aerosol particles provide alarm signals should the concentrations exceed a multiple of the derived air concentration (DAC) of the radionuclide of concern in a set amount of time. The cell and south stack extract ventilation was in operation and remained so for the duration of the work being carried out.

The equipment set-up above the roof port consisted of an inverted tripod mounted on the Cell 10 roof valve. The legs of the tripod were located on the valve centralised over the roof port to allow for easy and controlled access. Sectional deployment poles were mounted onto the tripod with a cell posting bag to be sealed to the pole above the scanner head attachment and a lay flat taped on and concertinaed over the deployment pole.

The scanning process was developed to be easy for classified personnel to deploy for health and safety reasons. Once the posting bag was secured to the pole, the power button on the 3D laser scanner was pressed to initiate the scanning process. The scanner was equipped with a sufficient time delay to allow for the deployment into the cell before scanning would commence.

Our client’s involvement on this project has resulted in the development of a novel method of specialist 3D scanning which could be deployed in the future in areas of environmental constraint such as contaminants and pollution. The work undertaken by the team has resulted in a clear advancement of industry specific knowledge.

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1. Focusing on the upfront cost, rather than the potential benefits.

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3. Misconception that patents are solely about protection.

4. Lack of awareness for what can be patented, and the Patent Box scheme in general.

5. Lack of guidance from professional advisors.

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R&D tax relief for engineering firms

Welcome to Wilby Jones guide to R&D tax relief for engineers.

What is R&D tax relief?

Why is R&D tax relief relevant for engineering firms?

Why does HMRC want to reward engineers for R&D?

What R&D costs are covered?

How can engineering firms make an R&D relief claim?

Claiming Research & Development Tax Relief

R&D activity

R&D spend

You must show there was uncertainty

Explain how you tried to overcome the uncertainty

Research and Development SME Scheme

Research and Development Expenditure Credit

3D Scanning Techniques for Nuclear Decommissioning

How do I get an Innovate UK grant? 

What is the Success Rate of Innovate UK Smart Grants?