Whether you’re claiming for the first time or need clarity on the 2024 rule changes, our experts have answered the most common R&D Tax Credit questions to help you understand how the scheme works and what’s changed.
R&D Tax Credits are here to reward businesses investing in innovation, making it easier for you to benefit from the work you’re already doing.
Here you’ll find answers to common questions about Research and Development (R&D) Tax relief from our expert team. If you need further advice, please contact us.
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R&D tax credit is a UK government incentive that rewards businesses working on innovation, whether that's developing new products, improving existing processes, or solving complex technical challenges.
If your company is spending money on research and development, you could reduce your Corporation Tax bill or even receive a cash credit.
The potential benefit can be worth up to 27% of your eligible R&D costs, depending on your company’s size, profitability, and the period you're claiming for.
For small and medium-sized enterprises (SMEs), R&D tax credits provide financial relief for money spent on innovation, such as developing new products, improving processes, or solving technical challenges. As of April 2024, most SMEs claim under the merged R&D scheme, which can offer up to 16.2% of eligible R&D costs back. R&D-intensive small businesses, those spending at least 30% of their total costs on R&D, may qualify for Enhanced R&D Intensive Support (ERIS), giving them access to even higher levels of relief (up to 27%).
R&D tax relief is more than just a tax break, it’s a powerful source of innovation support that can help your business grow, scale, and stay competitive. Whether you’re a start-up or a well-established company, claiming R&D tax credits can provide both financial and strategic benefits like:
R&D tax relief is designed to encourage UK businesses to invest in innovation by making it less financially risky. It can free up funds to reinvest in new ideas, recruit staff, or scale your technology, even if the project you're working on doesn’t succeed.
The R&D scheme has evolved in recent years, with new rules and stricter requirements. But with the right advice, businesses of all sizes can still unlock significant value. This incentive doesn’t just support the claiming company, but it fuels economic growth and technological progress across the UK.
R&D tax credit allows UK Limited companies to recover a portion of the qualifying costs they’ve spent on research and development projects, as either a
The claim is made through your company’s Corporation Tax return, known as the CT600
To qualify, your project must:
The R&D Expenditure Credit (RDEC) was originally designed for large companies but, from April 2024, its structure became the basis of the UK’s new merged R&D scheme. Under this system, companies can claim a taxable credit for qualifying R&D costs, which appears “above the line” in their accounts, helping to show the value of innovation on their balance sheet. Most companies now claim under this merged scheme, while R&D-intensive SMEs may still benefit from higher relief through the Enhanced R&D Intensive Support (ERIS) scheme.
Yes, but the rules are stricter under the merged R&D scheme and ERIS. Externally Provided Workers (EPWs) can qualify only if they’re on a UK payroll and subject to PAYE and National Insurance; overseas EPWs no longer qualify. Subcontractor costs can be claimed only if your company commissions and controls the R&D project, not if you’re delivering it for another business. The R&D activities must physically take place in the UK.
R&D tax credits remain valuable for both SMEs and large businesses, although the benefits vary under the new regulations. They can be worth up to 27% of eligible R&D costs, helping companies of all sizes reinvest in innovation, strengthen cash flow, and continue developing new technologies or processes, even when projects don’t go as planned.
No. R&D tax credits apply to both well-established companies and start-ups. If your project involves resolving scientific or technological uncertainties, where the solution isn’t obvious, your business may qualify.
Based on HMRC statistics published in 2025, reflecting activity during the 2023 - 2024 calendar years, the majority of R&D tax relief claims came from the Information & Communication, Manufacturing, and Professional, Scientific & Technical sectors. These innovation-led industries continue to dominate the R&D landscape, accounting for a large share of the total relief claimed across the UK. However, companies in other sectors can also qualify if their projects involve overcoming scientific or technological uncertainties.
No, you don’t have to be profitable to claim R&D tax relief. Even if your company is making a loss, you can still benefit by receiving a cash credit from HMRC. This makes the scheme especially valuable for start-ups and early-stage businesses investing in innovation before turning a profit. Whether you’re profitable or not, the key is that your project involves genuine scientific or technological uncertainty.
To make a valid claim, you’ll need to:
It’s essential to keep clear supporting records, such as:
This documentation is crucial, especially if HMRC raises an enquiry.
The way your R&D tax credit is paid depends on your company’s financial position and the type of R&D scheme you're claiming under.
HMRC typically pays out cash credits within 4 to 6 weeks of submitting your claim, though timings can vary depending on the complexity of the claim or if HMRC raises any queries.
Regardless of your situation, the claim is made through your Corporation Tax return (CT600), and you’ll need to calculate the correct R&D figures, submit a supporting technical report, and ensure all new requirements are met.
Errors or missing information in your CT600, technical report, or supporting documents can delay the process. Professional support and accurate records help ensure payment is both timely and correct.
You can make an R&D tax credit claim once per accounting period, usually every 12 months. Most businesses submit their claim when they file their annual Corporation Tax return (CT600). If your company carries out R&D regularly, you can claim every year, as long as each claim covers new or ongoing qualifying activities and meets HMRC’s requirements.
Common mistakes include claiming for projects that don’t meet HMRC’s definition of R&D, missing key documentation, or submitting inaccurate cost calculations. Many businesses also fail to link their technical narrative clearly to their financial data or forget to submit the required Additional Information Form (AIF). Errors in the CT600, poor record-keeping, or overclaiming for routine work can all trigger HMRC enquiries or lead to reduced relief.
You don’t legally need an accountant or R&D specialist to make a claim, but professional support can make a big difference. R&D tax relief rules are complex, and even small errors can delay payment or trigger an HMRC enquiry. Working with a specialist ensures your projects, costs, and reports meet HMRC’s latest requirements and helps you present your claim clearly and accurately, saving time, stress, and risk in the long run.
Yes. You can amend a previous R&D tax credit claim within two years of the end of your company’s accounting period, as long as it falls within HMRC’s amendment window. To do this, you’ll need to file an amended Corporation Tax return (CT600) with updated figures and an Additional Information Form (AIF) reflecting the revised details. HMRC may request supporting evidence, so make sure all changes are fully documented. If you’re amending due to an error or missed costs, professional advice can help ensure compliance and avoid triggering an enquiry.
The CT600 is your company’s Corporation Tax return, submitted to HMRC after the end of each financial year. It’s a legal requirement for all limited companies in the UK.
The form sets out details of your company’s:
The CT600 is the official place where your R&D tax relief claim is made. Without it, HMRC cannot process a reduction in tax or issue a cash credit.
You must enter the qualifying R&D expenditure in the correct section of the form and in some cases complete supplementary pages (CT600L).
Alongside the CT600, you also need to submit:
Mistakes or omissions in the CT600 can delay your claim or lead to rejection, so it’s important to ensure it’s accurate and fully supported.
Yes - If you’re unsure, working with an R&D specialist can help you avoid common pitfalls and make the most of your entitlement.
The Claim Notification Form tells HMRC in advance that your company intends to make an R&D tax relief or R&D expenditure credit claim for an accounting period beginning on or after 1 April 2023.
You must submit the form if:
You don’t need to submit it if you made a successful R&D claim on your original tax return (not by amendment) within the three-year period ending six months after the end of your current accounting period.
This falls within the claim notification period:
If your period of account is 12 months or less, it usually matches your accounting period.
If it’s more than 12 months, it will include multiple accounting periods, but you only need to submit one notification.
If you miss the notification deadline, your R&D Tax credit claim will be invalid.
You’ll need:
The Claim Notification Form can be submitted by:
The company had previously made one claim for the year ended 31 Dec 2022. However:
This claim is discounted. Because the company also missed the notification deadline, they cannot make an R&D claim for the year ended 31 Dec 2024.
The company had made two previous claims:
Because the 2020 claim is valid, the company does not need to submit a Claim Notification Form. They can still submit an R&D claim for 2024 (as long as it is before the normal amendment deadline).
If your situation doesn’t quite match the examples above, or you're not sure whether you're still within the deadline, we’re happy to help.
Just fill out the short form below with a few key details. Our team will review your information and let you know if you need to submit the Claim Notification Form, and exactly when it's due.
You’ll receive a personalised response from us within 1 business day.
Since 1 August 2023, HMRC requires every company making an R&D claim to submit an AIF before filing their Corporation Tax return (CT600). If you don’t submit it, your claim will be automatically rejected.
All companies submitting an R&D claim, whether first-time or not. This applies to:
The AIF is detailed and must be completed carefully. It includes:
The AIF must be submitted before you file your Company Tax Return (CT600). If you submit the CT600 without it, your claim will be invalid.
We recommend completing the AIF at least a few days in advance of your filing deadline to avoid technical issues or delays.
The AIF must be submitted through HMRC’s online service. It cannot be submitted by post or email.
Yes. As part of every R&D claim we manage, we prepare and submit the AIF on your behalf, ensuring your summaries meet HMRC’s latest requirements.
The amount you can claim in R&D tax credits depends on a few key factors:
From 1 April 2024, most companies now fall under the merged R&D scheme, however some businesses will be able to benefit from enhanced support if they meet the criteria as an R&D-intensive SME.
Your benefit usually works out as a percentage of your eligible R&D spend. Depending on whether you fall under the merged scheme, R&D-intensive SME support, or RDEC, the return can vary.
To get a quick estimate, use our simple R&D Tax Credit Calculator so you can instantly see how much you might be able to claim.
Yes! If your eligible R&D spend is £100,000, your benefit could range from £16,200 to £27,000, depending on which rate applies to your business.
Yes, in some cases. Under the current merged R&D scheme, the benefit is treated as taxable income because it reduces your Corporation Tax after being added to your company’s profits. Even so, the overall outcome remains positive, you’ll still receive a net cash benefit or lower tax bill. This ensures the incentive continues to support both profitable and loss-making businesses investing in innovation.
No. Under the merged R&D scheme (from April 2024), R&D tax relief is based on all qualifying R&D expenditure, regardless of any grants or subsidies received.
Yes, but please consider the timing of the rule changes:
Prior to April 2024: The rules were complex. R&D tax relief could be reduced depending on the type of grant or subsidy received. Some funding, like notified state aid, limited the portion of costs eligible for relief.
After April 2024 (Merged R&D Scheme): The “subsidised expenditure” rules have been removed. Receiving a grant or subsidy, including state aid like an Innovate UK grant, no longer reduces the amount of R&D tax relief you can claim. All qualifying R&D expenditure is fully eligible.
Use our Research and Development Tax Credit Calculator – it only takes a minute and gives you an instant estimate. For a tailored review, feel free to reach out. We're happy to help.
The R&D tax relief scheme has undergone significant reform in recent years, with changes introduced to strengthen the system and reduce misuse. While the framework has evolved, R&D tax relief remains a valuable source of support for innovative UK businesses.
Recent updates include:
Yes. For accounting periods beginning on or after 1 April 2023, first-time claimants, or companies that haven’t claimed in the last three years, must submit a Pre-notification before making a claim.
ERIS was introduced to give extra relief to loss-making SMEs that invest heavily in innovation. It’s a clear sign that the government wants to prioritise genuine, research-driven businesses.
Not at all. These reforms aim to focus relief on the right businesses, not cut it back. In fact, ERIS shows a stronger commitment to innovative and R&D-intensive companies.
If your company is actively investing in innovation, especially in new technology, software, or process development, R&D tax relief can still offer a meaningful return. While the impact can be especially significant for R&D-intensive and early-stage businesses, many companies find it offers valuable support.
R&D tax relief is available to UK limited companies that pay Corporation Tax and are investing in innovation. If your business is developing new products, processes, or technologies, or improving existing ones through scientific or technological advances, you could qualify.
To make it simple, we’ve built a short R&D Eligibility Assessment. It only takes a few minutes to complete, and once submitted, we’ll review your answers and get back to you within 3 business days to let you know if your business is likely to qualify.
According to HMRC’s definition, R&D (Research & Development) for tax purposes takes place when a company is working to resolve scientific or technological uncertainty and doing so in a structured way.
This could include:
Your project doesn’t need to succeed, even trial and error, experimentation, or technical failures can qualify.
Use our R&D Eligibility Assessment Tool. It takes less than 3 minutes, and we’ll follow up with tailored feedback so you know exactly where you stand.
When claiming R&D tax credit, your business must be carrying out qualifying activities, and the claim must be based on eligible costs linked to that work. HMRC’s guidelines make it clear these must relate to resolving scientific or technological uncertainty.
Typical qualifying costs can include:
*These costs apply only to accounting periods beginning on or after 1 April 2023
From 1 April 2024, most overseas R&D costs are no longer eligible for tax relief under the merged R&D scheme or ERIS. The restriction mainly affects subcontracted R&D and Externally Provided Workers (EPWs), unless the work must take place overseas for legal, environmental, or geographical reasons. To qualify, EPWs must be paid through UK PAYE and National Insurance. Strong evidence is needed to show why the activity couldn’t reasonably be done in the UK.
These are necessary supporting tasks carried out by the R&D team, such as:
No. R&D tax credits can only be claimed by companies that pay UK Corporation Tax. Because sole traders aren’t registered for Corporation Tax, they aren’t eligible to make a claim. The scheme is designed for limited companies carrying out qualifying R&D activities in the UK.
Every business is different, so the best way to be sure is to contact us. One of our team will be happy to review your projects and costs, explain what qualifies, and guide you through the next steps.
Accurate documentation is key to a successful R&D tax relief claim. With HMRC’s reviews becoming more rigorous, strong records help prove both the technical and financial aspects of your work. Keeping real-time records of your R&D activities and costs not only supports compliance but also reduces the risk of delays or enquiries.
Keep records as the work happens. HMRC expects you to demonstrate that the R&D was systematic and planned, not just labelled after the fact. Examples include:
Get your free project timeline here
Your financial records should clearly connect qualifying expenditure to your R&D activities. This includes:
To help you capture this info efficiently, we’ve created a Project Timeline Tool, free to download. To help you:
Since August 2023, you must:
We understand that R&D record-keeping can be challenging, especially with changing requirements. If you're unsure what to include or how to stay organised, don’t worry, you're not expected to have all the answers. For guidance, feel free to Contact Us. We’re always happy to help.
It means your project involved a genuine challenge where the outcome wasn’t obvious, even to experts. It must go beyond routine problem-solving, the solution wasn’t clear from the start, wasn’t available in any existing literature or it wasn’t certain if a solution was possible at all.
Explain what scientific or technological advance you were aiming for, not just for your company, but for the wider field. This could be a new process, product, service, material, or a significant improvement to an existing one. Then show that your project faced genuine unknowns that couldn’t be solved with existing knowledge, tools, or expertise.
Provide evidence of your investigation, such as:
You don’t need to succeed, even failed attempts count, as long as they show systematic effort to resolve the uncertainty.
Yes. Keep notes during the project (not just after). This helps prove that the uncertainty was real and not added in hindsight.
Meeting minutes, timelines, internal discussions, test results or even code or technical specs can all be useful evidence.
We explain how to approach this in our guide on record-keeping for R&D claims.
Yes. HMRC allows claims for failed or incomplete projects, as long as they involved genuine uncertainty and systematic effort to solve it.
Highlight the trial-and-error nature of your work. For example:
“When we tried [approach A], it caused [unexpected result X]. We switched to [method B], but that led to [issue Y]. We then tested [approach C] to address [challenge Z].”
You have two years from the end of your company’s accounting period to make a claim. This can be submitted in your original Corporation Tax return (CT600) within the first year, or as an amendment.
Example:
If your accounting period ended on 31 July 2024, you have until 31 July 2026 to make a claim.
You can claim R&D tax credits for projects completed in the previous two completed accounting periods. For example, if your financial year ends on 31 December 2024, you can still claim for eligible R&D carried out during 2023 and 2022, as long as those claims are submitted before their respective deadlines and you’ve completed the Claim Notification Form (CNF) if required.
Yes. From April 2023, there are extra deadlines you need to be aware of:
If you're close to the deadline or unsure of your dates, feel free to get in touch. We're happy to help you check your timeframe.
An R&D tax enquiry, also known as an HMRC compliance check, is a formal review to determine whether the projects and costs in your claim qualify for R&D tax relief. These enquiries typically last between 6 and 12 months but can take longer depending on complexity. If not managed properly, they may result in reduced relief, penalties, or increased scrutiny on future claims.
If HMRC opens an enquiry into your R&D tax relief claim, it means they want to take a closer look at part of your submission. This doesn’t necessarily mean something’s wrong, HMRC is simply applying more scrutiny as part of their standard compliance process.
If you choose to work with us, you won’t have to face HMRC on your own. We work alongside your development team to ensure your claim has been prepared accurately and in line with HMRC regulations. If an enquiry is raised, we also manage the entire process for you, from responding to HMRC’s questions and providing technical clarifications, to defending your position clearly and professionally. And importantly, this service comes at no extra cost.
Our approach is rooted in precision, strong evidence, and a clear understanding of what HMRC expects. You can feel confident knowing your claim is fully supported and in safe hands.
HMRC may open an enquiry if your R&D tax claim includes unclear or inconsistent information, lacks supporting evidence, or appears outside typical industry norms. Common triggers include missing documentation, vague technical descriptions, unusually high costs, or errors in the CT600 or Additional Information Form. Certain R&D tax claims may be selected for a routine review or enquiry.
If HMRC rejects your R&D claim, they’ll issue a formal notice explaining why, often due to missing evidence or disagreement over eligibility. You can appeal the decision within 30 days by providing additional information or requesting an independent review by an HMRC solicitor’s office. You can also request Alternative Dispute Resolution (ADR), where an impartial HMRC mediator helps both sides reach an agreement without a formal tribunal.
If the issue remains unresolved, you can appeal to the First-tier Tribunal (Tax Chamber), which will make an independent, binding decision.
If you’re unsure about eligibility, documentation, or how to respond to HMRC, our team at Easy R&D can help. We specialise in preparing compliant, evidence-backed R&D claims that meet HMRC’s latest 2025 requirements. Get in touch with one of our consultants for a free review and practical advice tailored to your business. Contact our R&D specialists.
Still have questions? We’d love to learn more about your business and explore how we can support you. Speak to our expert team today.
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