R&D, Contractors and IP: The Ownership Gap Businesses Overlook

April 29, 2026
Most businesses assume that if they’ve paid for innovation, they own it. In reality, that’s often not the case—and it can be a costly mistake.
Tom Nicolson, Partner at Bonham & Brook, sits down with Matthew Pryke, Managing Partner at Hamlins, who advises businesses daily on intellectual property and commercial risk. This conversation unpacks one of the biggest blind spots in modern R&D: IP ownership, why paying for innovation doesn’t always mean owning it, and how businesses can avoid costly mistakes.

 

Tom: Matthew, to set the context from our side, we’re seeing a big shift in how R&D is actually delivered. More and more businesses are relying on contractors as part of their innovation process, whether that is software, product development, or technical problem solving.

Under the current R&D rules, that spend can often be included in a claim. And with the merged scheme now bringing subcontracted R&D further into focus, especially for larger businesses, this is only becoming more relevant.

Which brings us to the key question. When multiple parties are involved, whose R&D is it?

 

Matthew : This ties directly into the biggest misconception we see. Businesses assume that if they have paid for something, they own it, whereas in reality that is often not the case. 

Unless there is a valid, signed IP assignment, ownership usually stays with the person or company that created it. 

What businesses are left with is a licence to use the IP, not ownership. And by the time they realise, the project is finished, the money has gone, and the leverage has disappeared. 

 

Tom: We’ve seen that on our side too. A client may have funded the work, led the project, and brought in external expertise, so naturally they assume it all sits with them from an R&D perspective.

But when we dig into the detail, it often comes down to what the contracts actually say. And that is where the legal position starts to shape the tax outcome.

Why do you think so many businesses still miss this?

 

Matthew: Three reasons, typically: 

First, the assumption that payment equals ownership; second, even where there is a contract, the IP provisions often do not properly deal with assignment; and third, suppliers usually know this, so if it is not addressed, they are not giving that value away. 

The key point is that if you deal with it upfront, most contractors will agree to assign IP. But it needs to be written clearly, agreed early, and crucially, signed. 

 

Tom: And this is not just a large project issue, is it?

 

Matthew:  Not at all. It applies everywhere. 

At the early stage, it applies to things like logos, websites, and software builds. Later on, it is major development projects, real estate design, and large-scale tech work. The principle is the same. 

The risk is that something small today becomes hugely valuable later. And if ownership was not secured at the start, fixing it down the line can be difficult and expensive. 

 

Tom: A lot of our clients are in that early growth phase. Moving fast, using freelancers, not necessarily thinking about IP in a strategic way yet.

So what is your simple advice to founders?

 

Matthew: Pause at the point of engagement.

When you bring in a contractor, ask whether the IP position has been properly dealt with. It does not need to be complex, just someone with the right knowledge checking the contract.

If it is documented and signed at the start, you can put it away and not worry about it again.

 

Tom: And from our side, that makes everything cleaner. If the ownership position is clear, the R&D claim becomes far more straightforward.

I had a recent example with a manufacturer working with major retailers. They were unsure whether the R&D sat with them or with the client they were producing for.

How would you approach that?

 

Matthew: We would break it down into three steps: 

  1. Understand the innovation. What was actually created? 
  1. Review the contracts between the parties. 
  1. Look at who actually carried out the work and what agreements sit behind that

 

Tom: And that is really the takeaway.

Contractor costs in R&D are valid. But whether the position holds up often comes down to the contracts sitting underneath it.

 

Matthew: Exactly. The legal and tax positions are not separate conversations. They are the same conversation viewed from two sides.

 

Takeaway

If you are using contractors in innovation, do not assume ownership. Agree it early, document it properly, and get it signed.

 

Hamlins LLP

Hamlins is trusted by businesses, entrepreneurs, and investors to navigate complex legal challenges with clarity and confidence. The firm offers expertise across corporate, commercial, intellectual property, real estate, and dispute resolution, combining deep sector knowledge with a practical, client‑focused approach. Whether advising on growth strategies, protecting innovation, or resolving disputes, Hamlins delivers tailored solutions that help companies move forward securely and strategically. -> https://hamlins.com/

 

Bonham & Brook

Bonham & Brook are specialist tax advisors & funding specialists, with expertise across Innovation, Energy Relief, Property Taxes, and Compliance. Our in-house sector experts and proven methodology have earned the trust of hundreds of companies across the UK & US. Turning complexity into clarity, Bonham & Brook excel in helping clients maximise financial incentives, reduce costs & reinvest in innovation; with compliance at the core of everything we do -> https://bonhamandbrook.co.uk/contact-us/

 

 

Thomas Nicolson

Partner, Bonham & Brook

 

 

Matthew Pryke

Managing Partner, Hamlins

 

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