Categories of Research and Development: understanding where your project sits within the Innovate UK framework

Innovate UK, part of UK Research and Innovation, supports innovative ideas and business growth through grant funding competitions. UK-based business and research organisations can apply for funding for research and development purposes, or to test their innovative ideas. Projects typically fall within four main research and development categories, each of which is explored below:

Fundamental Research

Fundamental research is the earliest stage of research and development and is usually undertaken by a research organisation. It involves the use of experimental or theoretical work to gain new knowledge of “underlying phenomena and visible facts.” Fundamental research does not involve any direct practical application or usage.

Feasibility Studies

A feasibility study involves analysis and evaluation of a project’s potential, uncovering its strengths, weaknesses, opportunities, and potential threats. Such studies will support the process of decision making. This can help businesses to decide whether to work individually or collaboratively before conducting a subsequent larger project.

Industrial Research

Projects that sit within the industrial research category involve planned research or critical investigation to gain new knowledge and skills. This is useful when the project aims to develop a new product, process or service to improve its existing counterpart. According to Innovate UK, it can include the creation of component parts to complex systems, as well as prototypes in a laboratory or environment with simulated interfaces.

Experimental Development

Experimental development involves the use of existing knowledge and skills in order to develop a new or improved product. Projects in this category should aim to make further technical improvements. To achieve this, projects may involve prototyping, demonstrating, piloting, testing and validation in environments representative of real-life operating conditions.

Within Innovate UK competition summaries, the competition scope specifies the desired category of R&D activity for that funding opportunity. For example, the ISCF Future Plastic Packaging Solutions competition intends to support feasibility studies and industrial research. You can find more information on each of the categories of research and development here, or contact us if you have any further questions.

Have you claimed your Research and Development (R&D) tax relief?

R&D tax relief form with stacks of coins and penRedKnight Consultancy has teamed up with LimestoneGrey, a leading independent chartered R&D tax credit consultancy, to promote the benefits of R&D tax credits. They are a government incentive designed to make innovation easier for small companies. SMEs can claim back up to 33p for every £1 spent on R&D activities, with the average claim currently standing at £54,000!

The tax definition for R&D purposes is more far-reaching than many businesses realise. Generally, it refers to the work undertaken to develop new products, processes, services or software. Making improvements to existing ones may also qualify. For example, if your business has developed an automated process, or one that is quicker, more efficient, and creates less waste, it may be eligible.

R&D tax credit claims are directly linked to the level of qualifying expenditure a business has incurred. Qualifying categories of expense include staffing costs, expenditure on subcontracted activities, external workers, consumables, computer software, and utilities. However, knowing which costs qualify is the easy part. Preparing a claim requires thorough understanding of the extensive rules and regulations, as well as the ability to produce a robust project report that withstands scrutiny from HMRC.

To find out how to maximise your claim and retrieve some of the money you've invested in innovation, contact us today.