Turning Innovation into Tax Relief for Growing UK Businesses

This article was featured in Your Business with Deborah Meaden – Winter 2025/26, where Easy Tax Solutions shared insight into how UK businesses can turn innovation into sustainable growth through compliant R&D tax relief.

Below, we explore the topic in more depth, outlining how recent changes to the R&D tax relief framework affect growing UK businesses and how the right approach can make the process clearer and more effective.

Read the full feature in Your Business with Deborah Meaden here:

Innovation sits at the heart of many successful UK businesses. From improving internal processes to developing new products, research and development often happens quietly alongside day-to-day operations. What many businesses do not realise is that this work could be supported through the UK’s R&D Tax Relief schemes, provided it is prepared correctly and meets HMRC’s evidential standards.

Recent HMRC figures show that larger companies have increased their use of R&D relief through the RDEC scheme, while SME claim volumes have reduced. This is not because smaller businesses are innovating less. In many cases, stricter compliance checks, additional documentation requirements, and uncertainty around eligibility have made the process feel more complex than it needs to be.

For SMEs, this can feel off putting. Questions around qualifying activity, technical evidence, and financial treatment often lead businesses to delay or avoid claiming altogether. That is where the right support can make a real difference.

The introduction of the merged R&D scheme has helped simplify some of the complexity that previously existed. For accounting periods beginning on or after 1 April 2024, the removal of the subsidised expenditure definition has created a more consistent framework, particularly for businesses that receive grant funding. While RDEC remains in place for now, it will be phased out for accounting periods beginning on or after 1 April 2026, making it important to understand how the merged scheme applies to your business.

For many SMEs, this change could broaden eligibility and reduce confusion around which rules apply. With the right guidance, businesses can prepare claims that reflect genuine technical advances while staying fully aligned with HMRC requirements.

R&D tax relief works best when it is treated as part of a wider growth strategy rather than a one-off exercise. Businesses that document their innovation properly, track qualifying costs accurately, and understand how their technical work fits the definition of R&D are often better placed to claim consistently.

SMEs still represent the majority of claimants, with sectors such as technology, manufacturing, scientific services, and professional services accounting for a significant share of claims. Opportunities also remain strong within green technology, health innovation, and agri-tech, provided claims are supported by clear evidence and robust financial data.

At Easy R&D, the focus is on making the process as straightforward as possible. Our three-step approach covers eligibility assessment, financial discovery, and claim preparation, ensuring you understand what qualifies and how your claim is built.

We work closely with you to explain the process in plain English, answer questions as they arise, and remove unnecessary stress from what can feel like a daunting task. The aim is simple, to help you access the relief you are entitled to, while staying fully compliant and confident in your claim.

If your business is investing time and resources into solving technical challenges, improving processes, or developing new capabilities, it may be worth asking a simple question. Are you capturing the full value of the innovation already happening within your business?