R&D tax credits for the retail sector

Many retailers and wholesalers will be developing solutions that automate, streamline and speed up their operations and supply chains. Any processes or software that are built to actively control stock levels, manage ordering and expedite delivery could qualify as R&D expenditure.

6,695

claims

£335

million

£50,037

Average claim value

What qualifies as R&D in the retail sector?

We find qualifying R&D in the way that retailers and wholesalers are responding to client demand. It is apparent in the development of sophisticated customer facing e-commerce platforms. But also in the backend interfaces that need to communicate with stock and accounts systems, where an off the shelf solution is not available and bespoke software is required.

We also see innovation in the development of Apps, where an existing off the shelf App has to be modified or have additional code written to allow it to communicate with other previously untried software packages or databases.

This sector includes the following types of business.

  • Wholesale and retail of food, beverages and tobacco
  • Wholesale and retail of household goods
  • Wholesale and specialised retail trade and repair of motor vehicles
  • Wholesale of agricultural raw materials and live animals
  • Wholesale of machinery, equipment and other supplies

Yes, retailers can claim under either scheme depending on their size and other deciding factors. Of the R&D tax relief claims made in 2018-19 so far, 91% of them were under the SME scheme equating to 66% of the value claimed.

Yes, retailers that have already claimed for R&D tax credits might find that they could claim even more by applying for the Patent Box scheme. In 2018-19, so far, 240 companies claimed under Patent Box, totalling £19 million in benefit.

Retail case studies

Urban Cottage Industries Ltd

Industry: Retail

  • GovGrant helped make a claim against expenditure on an R&D project which failed initially
  • Claims made by CCS under the R&D tax credit scheme have increased by 500% over four years

Read full Urban Cottage Industries case study