0117 926 9022 white phone icon

Do R&D tax credits apply to an LLP?

by Gemma Brown

Research and development (R&D) tax credits can only be claimed by companies which are liable to UK Corporation Tax. Limited Liability Partnerships (LLPs) do not pay UK Corporation Tax and as a result they usually cannot claim R&D tax credits.

R&D tax credits are a form of Corporation Tax relief and so, as a limited liability partnership (LLP), you cannot usually claim as you are not registered for UK corporation tax.

Conditions for claiming as an SME:

  • Company is a going concern.
  • Company is within the charge to UK Corporation Tax.
  • Company meets the SME thresholds for headcount and turnover or balance sheet assets.
  • The company carries out a trade or future trade to which the R&D activities relate.
  • The R&D activities claimed have not been contracted to the company.
  • Expenditure is deductible for corporation tax purposes in the claim period.
  • No grants or subsidies have been received in respect of the expenditure.

When LLPs can qualify for R&D tax credits

If your partnership has a corporate partner, that corporate partner will be subject to Corporation Tax on its share of profits from the partnership. You therefore may be able to benefit from R&D tax credits for R&D activities carried out by the partnership, in proportion to your partner profit-share.

With a team of chartered tax advisers, technical specialists and former HMRC inspectors, ForrestBrown’s award-winning technical expertise ensures that our clients maximize the value of their R&D tax credit claims…even when their circumstances are not straightforward or their qualifying activity is difficult to identify.

Back to top

This article was last updated on 28 November 2018.

Section overview section overview icon

Do you have more questions?

Get in touch

Find out about our claim process

How we make a claim