R&D Tax Credits for Glasgow Tech and Creative Businesses

Glasgow tech, software, and creative businesses that spend on qualifying research and development can claim R&D tax credits under the merged scheme. From April 2024, the merged scheme applies a 20% above-the-line R&D expenditure credit to qualifying spend. For a Glasgow company spending £100,000 on qualifying R&D, the credit is £20,000 — reducing the corporation tax bill or generating a payable credit if the company is loss-making.

What is the merged R&D scheme?

From 1 April 2024 the previous SME and RDEC schemes were merged into a single scheme for most companies. The merged scheme provides a 20% above-the-line credit on qualifying R&D expenditure. The credit is taxable — it is added to income and then the resulting tax liability is reduced by the credit. The net benefit at the main corporation tax rate of 25% is effectively 15p for every £1 of qualifying spend.

What counts as qualifying R&D for Glasgow businesses?

R&D for tax purposes means work that seeks to advance science or technology and involves the resolution of scientific or technological uncertainty. For Glasgow tech businesses this can include developing new software features that are not achievable using standard techniques, building novel machine learning models, or creating new integration architectures. Creative businesses — games developers, animation studios, digital agencies — may qualify where the technical challenges go beyond standard implementation.

• Software development involving novel algorithms or approaches.

• Prototyping where the outcome is technically uncertain.

• Testing and validation work linked to advancing a technology.

• Staff costs, subcontractor costs (65% cap), consumables, and cloud computing costs.

What does not qualify?

• Routine software updates, bug fixes, or feature enhancements using known methods.

• Market research, feasibility studies not involving technical uncertainty.

• Capital expenditure (covered separately by capital allowances).

The advance notification requirement

From 1 April 2023, companies claiming R&D tax credits for the first time — or after a gap — must submit an advance notification to HMRC before filing the CT600 claim. Failure to notify on time means the claim is invalid. Companies planning to make a first R&D claim must notify HMRC within six months of the end of the accounting period.

Countify's R&D tax credit service covers claim preparation, qualifying expenditure analysis, and advance notification. Visit our R&D tax credits service in Glasgow or our R&D tax credits page in Edinburgh to find out more.