R&D Tax Credits FAQs

To make a valid claim, you’ll need to:

• Include your eligible R&D costs in the company’s tax return, such as staff time, subcontractors, consumables, and software.
• Submit a detailed technical report, describing what the project aim was, the uncertainties it tackled, and why it qualifies.
• Submit an Additional Information Form (AIF) online before filing your CT600. This is mandatory for all claims from August 2023 onwards.
• If you’re a first-time claimant or haven’t claimed in the last three accounting periods, you must also file a Claim Notification Form within six months of your year-end.

It’s essential to keep clear supporting records, such as:

• Timesheets
• Technical notes
• Cost breakdowns

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.

• If your company is in profit, the relief usually comes as a tax reduction. It lowers the amount of Corporation Tax you owe for that financial year. This means you simply pay less tax than you would have without the claim.
• If your company is loss-making or has low profits, you may be able to surrender your losses and receive a cash credit from HMRC. This is especially valuable for early-stage businesses that aren’t yet making a profit but are investing heavily in innovation.

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.

• If you’re owed a repayment, the money is usually transferred directly to your company’s business bank account.
  
• If it’s a tax reduction, HMRC will adjust your liability and confirm your updated tax position.

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.

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:

• Income
• Expenses
• Reliefs
• Tax liability

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:

• A detailed technical report, explaining how your work meets HMRC’s R&D criteria
• An Additional Information Form (AIF), which must be submitted separately online before the CT600 for all claims from August 2023 onwards
• A Claim Notification Form, if you are a new claimant or haven’t claimed in the last three years.

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’re claiming for the first time, or
• You haven’t made an R&D claim in the last three years, measured from the last date of your claim notification period.

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:

• From the first day of your period of account,
• to six (6) months after the end of that same 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:

• Company’s Unique Taxpayer Reference (UTR)
• Contact details for your main internal R&D contact (e.g. director)
• Contact details for any agent involved in preparing the claim
• Start and end dates for your accounting period and period of account
• A summary of planned R&D activities (high-level overview only)

The Claim Notification Form can be submitted by:

• A company representative, or
• An authorised agent acting on your behalf

• Period of account: 1 Jan 2024 – 31 Dec 2024
• Claim notification period: 1 Jan 2024 – 30 June 2025

The company had previously made one claim for the year ended 31 Dec 2022. However:

• It related to an accounting period before 1 April 2023, and
• It was made via an amendment after 1 April 2023

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.

• Period of account: 1 Jan 2024 – 31 Dec 2024
• Claim notification period: 1 Jan 2024 – 30 June 2025

The company had made two previous claims:

1. Year ended 31 Dec 2020 – amended and received by HMRC on 31 Dec 2022 (Valid, amended before April 2023)
2. Year ended 31 Dec 2021 – amended and received by HMRC on 31 Dec 2023 (Discounted, period before April 2023, amended after April 2023)

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).

The amount you can claim in R&D tax credits depends on a few key factors:

• Your R&D spend
  
• The size of your company 
  
• Whether you’re profitable or loss-making 
  
• Which scheme applies to your accounting period

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.

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:

• The introduction of a merged R&D scheme from April 2024
• Adjusted benefit rates for both profit- and loss-making companies
• Expanded eligible costs, including data and cloud services
• Stricter documentation and reporting requirements, including the new Additional Information Form

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.

Eligibility depends on the type of work you’re doing, but if you’re developing new products, processes, or technologies, there’s a good chance you could qualify.

To make it simple, we’ve built a short R&D Eligibility Assessment. It only takes a few minutes. Once submitted, we’ll review your answers and 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:

• Developing new or improved products, processes, or services where the solution wasn’t obvious.
• Improving an existing product, process, or service where the solution wasn’t obvious

Your project doesn’t need to succeed, even trial and error, experimentation, or technical failures can qualify.

• The work must aim to create an advance in science or technology, not just for your business, but for the wider field.
  
• There must be scientific or technological uncertainty that a competent professional couldn’t easily resolve.
  
• You must have followed a process of testing, development or investigation to overcome the uncertainty.
  
• The work should not focus on areas like design, aesthetics, arts, humanities, or social sciences (e.g. economics), which are excluded from the scheme.

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:

• Software
  
• Consumables
  
• Subcontractors
  
• Clinical Trials
  
• Contributions to independent research
  
• Externally provided workers
  
• Utilities 
  
• Direct Staff costs
  
• Data Licence*
  
• Cloud computing costs *

*These costs apply only to accounting periods beginning on or after 1 April 2023

• Ideas capture
  
• Technical Feasibility Studies
  
• Proof of concept
  
• Modelling
• Pre-testing and development of prototypes
• Alpha / Beta testing
  
• Further prototypes build and field trials

These are necessary supporting tasks carried out by the R&D team, such as:

• Admin, maintenance, or payroll linked to R&D staff
  
• Security or support activities, provided they’re dedicated to R&D

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: 

• Project scopes or briefs 
  
• Notes from technical meetings 
  
• Development logs, test results or trial data 
  
• Internal communication about technical decisions 
  
• Photos or diagrams of prototypes or iterations 

Get your free project timeline here

• What scientific or technical uncertainty you tackled 
  
• What advance you aimed to achieve 
  
• Why the work wasn’t routine or obvious 
  
• What investigative steps you took to resolve it 

Your financial records should clearly connect qualifying expenditure to your R&D activities. This includes: 

• Salaries and time spent on R&D 
  
• Subcontractor and agency costs 
  
• Software and cloud costs used for development 
• Consumables and prototypes used up in the process 

To help you capture this info efficiently, we’ve created a Project Timeline Tool, free to download. To help you: 

• Track project stages and milestones 
  
• Record who worked on what and when 
  
• Prepare for HMRC’s Additional Information Form

Since August 2023, you must:

• Submit the Additional Information Form before your CT600 
• Submit a Claim Notification Form if you’re a new claimant or haven’t claimed in 3 years 

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.

• What made the project technically difficult 
  
• Why the solution wasn’t obvious, even to experts 
  
• What unknowns you had to overcome along the way 
  
• Demonstrate that a competent professional couldn’t easily solve the problem with existing knowledge or tools. 

Provide evidence of your investigation, such as:

• Prototypes built and tested 
  
• Failed approaches or pivots 
  
• Iterative trials and adjustments

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. 

• A new product that didn’t succeed due to technical limitations 
  
• A process that was tested but ultimately proved unviable 
• A prototype that showed the idea couldn’t be achieved with current tools 
  
• A software feature that was too complex to integrate 

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.

Yes. From April 2023, there are extra deadlines you need to be aware of:

• Claim Notification Form: If you're a first-time claimant (or haven’t claimed in the last 3 years), you must notify HMRC of your intention to claim within 6 months of the end of your accounting period. 
• Additional Information Form (AIF): From August 2023, all claimants must submit this online form before filing the CT600 that includes the claim. 

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.

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. 

• Whether your project truly involved scientific or technological uncertainty, not just routine work 
• That the claimed activities aimed to achieve an advance in overall knowledge or capability, not just your company’s own know-how 
• Whether the costs claimed are both eligible and correctly apportioned under the scheme 
• How the R&D activities were conducted, recorded, and evidenced contemporaneously 
• That the information in the claim and supporting documents is accurate and consistent 

• You’ll receive a letter outlining what HMRC is reviewing. 
• They may request more technical detail, cost breakdowns, or evidence. 
• You’ll have the opportunity to respond and clarify your position. 
• Once reviewed, HMRC will either approve the claim, reduce the benefit, or disallow it, depending on their findings. 

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.