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R&D Tax Credits for Healthcare & Medical Device Companies

Healthcare and medical device companies develop products and systems that must meet demanding requirements for safety, usability, accuracy and reliability. Projects involving devices, diagnostics, digital health, sensors, materials or manufacturing may qualify where teams must resolve scientific or technological uncertainty.

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Innovation in healthcare & medical devices

Healthcare & Medical Devices businesses solve technical problems every day.

Innovation in healthcare and medical devices often combines clinical needs with engineering, materials, software and regulated production. Qualifying R&D can arise at any stage where technical performance cannot be readily achieved or predicted.

This includes work across:

Medical device design
Diagnostics and assays
Digital health platforms
Clinical software
Wearable and implantable sensors
Biocompatible materials
Sterile manufacture
Human factors and usability
Imaging technology
Data interoperability
Remote monitoring
Production scale-up

Qualifying R&D may arise where a business is not simply applying known methods, but is testing, adapting or developing a new approach because the scientific or technological answer is uncertain.

Explore our R&D tax relief service for help assessing your healthcare and medical devices projects and preparing a claim.

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Qualifying R&D

How healthcare and medical device businesses can qualify for R&D Tax Credits.

Qualifying R&D can arise where a project seeks an advance in science or technology and competent professionals must carry out systematic work to resolve genuine technical uncertainty.

Developing medical devices R&D may arise in performance, reliability, miniaturisation, safety or usability where standard designs are insufficient.
Creating diagnostics and sensing systems Projects can qualify where sensitivity, specificity, calibration or biological variability creates uncertainty.
Developing clinical and digital health software Technical uncertainty may sit in algorithms, interoperability, security, data quality or performance at scale.
Working with biocompatible materials Testing material behaviour, coatings, sterilisation and patient interaction can involve qualifying R&D.
Improving regulated manufacturing New processes may qualify where teams must resolve uncertainty in sterility, consistency, yield or validation.
Integrating devices and healthcare systems R&D may arise where hardware, software and clinical workflows must be combined beyond established capability.

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A note from Dr Jack Brent

Healthcare & Medical Devices R&D claims need clear technical evidence.

Healthcare & Medical Devices projects can look like routine commercial delivery from the outside, even when the team has worked through difficult scientific or technological uncertainty. A defensible claim must identify the advance sought, the available baseline and why a competent professional could not readily determine the solution.

InnoFund separates ordinary delivery from the qualifying work and connects the technical narrative to contemporaneous evidence and eligible expenditure. That produces a focused claim that can withstand HMRC scrutiny.

Dr Jack Brent

Senior R&D Tax Manager

PhD in Materials Science and MChem in Chemistry.
ATT qualified with detailed knowledge of the UK R&D tax regime.
Research experience across advanced materials, battery technology and solar energy harvesting.

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“Would highly recommend, they know their stuff! They assisted greatly with an R&D claim rejection by HMRC.”

“Excellent from start to finish, lovely team and a great result. Highly recommended.”

Clear boundaries

Not every healthcare & medical devices project qualifies.

Commercial value, novelty or project difficulty do not qualify a project on their own. Examples of work that may fall outside the scheme include:

Routine delivery using established methods
Standard installation or configuration
Ordinary maintenance and repair
Commercial or cosmetic changes
Routine quality control
Straightforward replication of an existing solution
General project management
Work completed after technical uncertainty was resolved

Many projects contain a mixture of qualifying and non-qualifying activity. InnoFund identifies the technical boundary so the claim remains accurate and proportionate.

Eligible expenditure

Eligible R&D costs for healthcare and medical device businesses.

Costs directly connected to qualifying activity may include:

Staff time spent on qualifying R&D
Employer National Insurance and pension contributions
Subcontracted R&D, where eligible
Externally provided workers
Software, cloud computing and data costs used for R&D
Materials and consumables used in trials
Prototype components and testing costs
Technical consultancy, where eligible

We trace expenditure back to the qualifying work and apply the rules relevant to the company, contract and accounting period.

Evidence & scrutiny

HMRC risk areas for healthcare & medical devices R&D claims.

A strong claim explains the science or technology rather than relying on broad statements about innovation. Common risk areas include:

Claiming commercial complexity rather than technical uncertainty
No clear baseline of existing science or technology
Routine work presented as R&D
Weak records of trials, failures and iteration
Incorrect treatment of subcontracted or customer-funded work
No competent professional input
Overclaiming whole projects instead of qualifying activity
Unclear project and cost boundaries

InnoFund reviews both the technical position and the expenditure so each claim is clear, evidence-led and defensible.

Assess your project

Can healthcare and medical device businesses claim R&D Tax Credits?

Yes. Healthcare and medical device businesses can claim where a project seeks an advance in science or technology and competent professionals must resolve genuine technical uncertainty through systematic work.

What types of healthcare & medical devices projects may qualify?

Qualifying work may include Medical device design, Diagnostics and assays, Digital health platforms, Clinical software, Wearable and implantable sensors, Biocompatible materials. Eligibility depends on the technical advance sought and the uncertainty encountered, not simply the commercial value of the project.

Do prototypes, trials or failed projects qualify?

They can. A project does not have to succeed, and prototypes or failed trials can provide strong evidence that the outcome was not readily deducible at the outset. The work must still form part of a systematic attempt to resolve technical uncertainty.

Can software, automation or process improvements qualify?

Yes, where the business has to develop or materially adapt technology rather than simply buy, configure or use an established solution. The claim should explain the performance gap, technical uncertainty and work undertaken to resolve it.

Which costs can be included in a claim?

Eligible expenditure may include qualifying staff costs, employer contributions, software, cloud and data costs, consumables, prototype materials, externally provided workers and some subcontracted R&D. The exact treatment depends on the accounting period and scheme rules.

What evidence should healthcare and medical device businesses keep?

Useful evidence includes design records, test results, trial data, technical notes, project plans, calculations, software logs, photographs, failure records, meeting notes, cost records and explanations from the competent professionals who led the work.

Your next step

Don’t guess. Know for sure.

Got a project you want to discuss? InnoFund separates routine delivery from genuine R&D so claims are accurate, compliant and properly evidenced.

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Healthcare & Medical Devices businesses solve technical problems every day.

Healthcare & Medical Devices R&D claims need clear technical evidence.

Eligible R&D costs for healthcare and medical device businesses.

HMRC risk areas for healthcare & medical devices R&D claims.

Patent Box & Knowledge Development Box

Capital Allowances & Land Relief

HMRC & Revenue Support

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