R&D Tax Credits UK —
Recover Up to 33p for Every £1 You Spend

Qualifying R&D must seek to achieve an advance in science or technology by resolving scientific or technological uncertainty — uncertainty that could not be readily resolved by a competent professional in the field. This includes: developing new or significantly improved software, products, processes or materials; solving engineering problems without a known solution; creating novel manufacturing processes; or developing new treatments or diagnostics. R&D does not need to be successful to qualify — failed attempts at genuine R&D are still eligible.

Under the merged scheme (from April 2024), all companies receive an enhanced deduction of 186% of qualifying R&D expenditure — meaning £100 of R&D costs generates a £186 deduction against taxable profits. For a profitable company paying 25% Corporation Tax, this saves £21.50 per £100 of R&D spend (net of the original deduction). For loss-making R&D-intensive SMEs (qualifying R&D above 30% of total expenditure), losses can be surrendered for a 27% cash credit — worth £27 per £100 of qualifying R&D.

From August 2023, HMRC requires all R&D claims to be accompanied by an Additional Information Form (AIF) submitted online before or at the same time as the CT600. The AIF captures details of the qualifying projects, the scientific/technological advance sought, the uncertainties resolved, and a breakdown of qualifying costs by category. Claims submitted without an AIF are rejected by HMRC. We prepare and submit the AIF for every R&D claim as part of our standard service.

From April 2023, companies that have never made an R&D claim before must notify HMRC within 6 months of the end of the accounting period for which they intend to claim — i.e. by the date 6 months after the year end. Failure to notify means the claim cannot be made. This notification requirement affects first-time claimants — including companies that have been doing qualifying R&D for several years without claiming. We check notification requirements for every new R&D client.

Yes — HMRC’s R&D compliance team actively reviews claims, particularly following their Fraud and Error Action Plan. Enquiry areas include the legitimacy of qualifying activities, staff cost allocation methodology, subcontractor eligibility and the technical narrative quality. We prepare all claims to withstand HMRC scrutiny and provide full enquiry support if HMRC challenges a claim. Our technical narratives cite specific project details and resolve the qualifying uncertainty clearly — the most effective defence against enquiry.

The most expensive R&D myth is that only companies with laboratories and PhDs qualify. HMRC’s definition of R&D is broad — it includes any systematic work that seeks to resolve scientific or technological uncertainty where the solution was not readily available to a competent professional. Software developers debugging novel algorithmic challenges, engineers solving unique structural problems and manufacturers developing new production processes are all doing qualifying R&D. We assess eligibility across all sectors.

Staff costs are typically the largest component of an R&D claim — covering salaries, employer NIC and employer pension contributions for staff directly involved in qualifying R&D. Many claims under-include staff costs by only counting time spent in a laboratory or dedicated R&D role — missing time spent by project managers, software developers, technical directors and production engineers who contribute to qualifying projects. We prepare detailed staff cost allocations based on time surveys and project records.

First-time R&D claimants must notify HMRC of their intention to claim within 6 months of the end of the accounting period for which they intend to claim. Missing this window permanently bars the claim for that period — even if the qualifying activities are genuine and well-documented. Many companies discover R&D relief years into qualifying activity without realising they needed to notify HMRC. We check notification requirements for every new R&D client.

Generic R&D claim preparers who apply standard templates without understanding your specific technology, processes or industry often produce claims that HMRC’s technical assessors can easily challenge. Our R&D claims are prepared by accountants who understand your sector — with technical narratives that demonstrate genuine understanding of the advance sought and the uncertainty resolved.