R&D Relief Claims
Since its introduction in April 2000, R&D tax relief has remained one of the most generous tax incentives available to UK companies undertaking qualifying innovation activities.
For accounting periods beginning on or after 1 April 2024, claims are made under the merged R&D Expenditure Credit (RDEC) scheme, or, for companies that meet the definition of R&D intensive, under the Enhanced R&D Intensive Support (ERIS) scheme.
HMRC eligibility checking tool
The merged RDEC scheme is available to companies that are trading, within the charge to corporation tax, and carrying out projects that meet the statutory definition of R&D — based on the BIS definition and considerably more stringent than normal product development. Under this scheme, claimants receive a taxable R&D expenditure credit at a rate of 20%.
The ERIS scheme provides additional support to loss‑making SMEs whose qualifying R&D expenditure is at least 30% of their total costs. These companies may deduct an additional 86% of qualifying expenditure when calculating their trading loss, alongside the standard 100% deduction already recognised in the accounts. They may then claim a payable tax credit worth up to 14.5% of the surrenderable loss, with no corporation tax liability on the credit received.
Qualifying Expenditure
R&D qualifying costs typically relate to:
- Staff salaries
- Employer NIC and pension contributions
- Consumable items
- Subcontractor costs
- Software expenses
- Data licence costs
- Cloud computing services
R&D starts when a business begins structured work to solve a scientific or technological challenge, and it finishes when that challenge has been resolved or the work stops. The R&D phase is considered complete when the new knowledge can be used by a qualified professional, or when a working prototype or pilot version that performs like the final product or process has been created.
Claiming R&D Tax Relief
R&D tax relief is claimed through the company tax return (CT600).
Depending on the circumstances, companies may need to submit:
- An Advance Notification
- An Additional Information Submission
Businesses concerned that their R&D claim may attract scrutiny or trigger a corporation tax enquiry may wish to consider our Tax Fee Protection Service for added assurance.
Our Process
When you engage us to support an R&D claim, our process typically includes:
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Initial assessment
Reviewing activities, costs, and uncertainties to confirm eligibility under the RDEC or ERIS schemes.
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Detailed analysis and project review
Identifying qualifying R&D activities, evaluating scientific or technological uncertainties, and ensuring cost categories are correctly allocated.
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Preparation of supporting documentation
Producing the technical narrative, cost schedules, and all supplementary information required for HMRC compliance.
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Submission and ongoing support
Completing the CT600 claim process, submitting additional disclosures where required, and assisting with any HMRC follow‑up.