Engineering R&D
How R&D tax credits apply to engineering firms: product development, prototyping, process innovation, and eligible costs.
For R&D tax consultant services and how R&D tax credits work, see our dedicated pages.
engineering R&D and R&D tax credits: overview
Engineering R&D covers product development, prototyping, and process innovation where there is genuine technical uncertainty. Tax authorities look for work that seeks an advance in science or technology—for example new materials, performance limits, or system integration—that a competent professional could not readily deduce. R&D tax credits can apply to engineering firms when the work meets the relevant regime's tests for qualifying R&D activities. A research and development tax consultant can help you separate qualifying from non-qualifying work and align your R&D tax claim process with authority expectations. Whether you operate in the UK, UAE, or Ireland, understanding how R&D tax credits work in your jurisdiction is the first step to maximising relief.
Key areas for engineering R&D
Product development, prototyping, and technical uncertainty
Qualifying activities often include new component or system design, failure analysis and resolution, performance optimisation involving scientific or technological uncertainty, and development of new manufacturing or testing methods. Routine product tweaks or standard engineering usually do not qualify; problem-solving that addresses genuine technical uncertainty does. The boundary between development and R&D can be unclear—authorities expect you to show that the work sought an advance in science or technology and that competent professionals could not readily deduce the solution. Engineering R&D that meets these tests is typically eligible for research and development tax relief, subject to regime-specific rules on qualifying expenditure and claim process.
Common eligible costs for engineering R&D
Staff time of engineers and technicians directly engaged in qualifying R&D, subcontractor costs (subject to regime rules), materials and consumables used in R&D, and certain software and equipment. Documentation that clearly links time and cost to qualifying R&D activities supports a robust R&D tax claim. Many engineering firms underclaim because they do not capture all eligible costs or cannot demonstrate the link to qualifying work. Our R&D tax consultant services include documentation systems and readiness assessment tailored to engineering and manufacturing, so you can claim with confidence and withstand scrutiny.
How R&D tax credits apply to engineering firms
Engineering firms in the UK, UAE, and Ireland can claim research and development tax relief on qualifying expenditure. Eligibility and relief rates differ by jurisdiction: UK (HMRC) and Ireland (Revenue) have established schemes; the UAE R&D tax incentive is expected to launch. A research and development tax consultant can help you navigate the rules, prepare claims, and plan for multi-year benefit. For more on eligibility and relief rates, see our guides on how R&D tax credits work and who is entitled to R&D tax credits.
Related content
- All industries we supportOverview of R&D tax credits by industry
- R&D tax consultant servicesReadiness assessment, documentation, advisory
- How R&D tax credits workEligibility and relief by region
- Contact usDiscuss your R&D tax claim process
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