Could your AI innovation be earning you R&D Tax Relief?

AI is changing how agencies and consultancies operate, from automating tasks to exploring smarter, faster ways of delivering client work. But while you’re busy experimenting with what AI can do, you might be overlooking something just as valuable: R&D tax relief.

Every year, thousands of businesses across the UK miss out on claiming for the genuine innovation they’re working on, often because they don’t think it counts. At Wow, we’re on a mission to change that. Because if you’re tackling real technical challenges in building, developing and experimenting with technology, you could be entitled to a significant tax refund.

Let’s break it down.

What kind of AI activity could qualify?

R&D (Research & Development) tax relief is designed for projects that push boundaries and solve problems where the outcome isn’t known in advance. That means it’s not about simply using AI tools; it’s about creating or advancing technology in a way that involves scientific or technological uncertainty.

Some AI-related projects that may qualify include:

Developing your own AI tools or algorithms to automate processes.
Training models in new ways (for example, overcoming gaps in data, scalability issues or accuracy problems).
Building platforms that rely on machine learning or predictive analytics to achieve outcomes not readily available off the shelf.
Working with natural language processing where you need to resolve technical uncertainties, for example, developing new methods to improve accuracy, scalability or reliability.
Trying and failing to resolve a technical problem (failed attempts can still count if they involve systematic R&D).

It’s worth noting: using existing AI tools or APIs “as is” won’t normally qualify. For example, plugging ChatGPT straight into your workflow is unlikely to count. However, if you’re combining APIs or systems in a way that creates new functionality, and you need to resolve technical uncertainties to make it work, then that could fall within HMRC’s definition of R&D.

Why AI is such an active area right now

The AI landscape is evolving at speed. That means there are plenty of unknowns, iterations, and investigative work. All of this can create qualifying R&D activity if you’re addressing genuine technical challenges.

HMRC’s updated guidelines make it clear that tech and digital innovation are very much in scope. The key, though, is being able to show where your work goes beyond implementation and into advancing science or technology.

Real-world examples

Here’s what can (and can’t) qualify in practice:

Qualifying: A marketing agency developing a custom predictive model to automatically flag campaign issues, where no existing solution was available.
Qualifying: A consultancy training a large language model on its own data, requiring new methods to handle accuracy and bias.
Not qualifying: Simply integrating an AI-powered API into a dashboard, without overcoming technical hurdles.

In other words, it’s not the presence of “AI” that matters; it’s the problem you’re solving.

“We didn’t think it would qualify…”

That’s what we hear most often. And it’s why we’ve built a simple, friendly process to help you figure out if your project is eligible, without the jargon, and without wasting your time.

In the past financial year alone, we’ve already helped UK agencies and consultancies claim nearly £2,000,000 of R&D tax relief. We’d love to help you too. Whether you’re experimenting with AI or deep into a complex build, it’s worth checking.

How to find out if your AI project qualifies

We’re not fans of overpromising. Here’s how it works:

You tell us what you’re working on - a quick conversation or form is all it takes.
We assess your eligibility - if there’s a valid claim, we’ll let you know.
We do the heavy lifting - writing the report, liaising with HMRC, keeping it stress-free.

If you’re curious, let us know what you’re working on and we’ll take it from there. Fill out this form to get started.

AI isn’t just a buzzword anymore. It’s part of how modern agencies and consultancies are evolving. If you’re investing time, brainpower and budget into solving technical challenges, let’s make sure you’re getting the financial support you’re entitled to.