Short answers to the questions the academy is asked most about UK R&D tax relief, grouped the way the country guide is organised: eligibility, costs and calculation, claiming and deadlines, and reviews. Each answer gives the rule in a sentence or two and links to the page that covers the subject in full, with the official sources. The answers describe the rules for accounting periods beginning on or after 1 April 2024 unless they say otherwise. This page carries FAQPage structured data.
Eligibility
Who can claim UK R&D tax relief?
Companies within the charge to UK Corporation Tax that carry out qualifying R&D. The merged scheme is open to companies of any size. ERIS is for loss-making SMEs that meet the R&D intensity condition. Individuals and partnerships cannot claim. See eligibility.
What counts as R&D for tax purposes?
A project qualifies if it seeks an advance in science or technology by resolving scientific or technological uncertainty. HMRC applies the government's guidelines on the meaning of R&D for tax purposes, which judge uncertainty by whether a competent professional in the field could readily have resolved it. See eligibility.
Does a project have to succeed?
No. R&D is the attempt to resolve the uncertainty; a project that fails can still qualify, and often shows the uncertainty was real. The R&D ends when the uncertainty is resolved or the work is abandoned, so costs after that point are not claimed.
Is our software project R&D?
Only where the advance is in computer science or software engineering and the approach was genuinely uncertain. Using established tools and frameworks as intended, routine integration and new products built from known techniques are not R&D, however commercially new. See industries.
Costs and calculation
Which costs qualify?
Staffing costs, externally provided workers and contracted out R&D at 65% of payments to unconnected parties, consumable items, software, data licences and cloud computing, and payments to clinical trial volunteers. Capital expenditure, rent, rates, patent costs and general overheads do not, although capital spending on R&D may qualify for research and development allowances outside the relief. See eligible expenditure.
How much is the relief worth?
Under the merged scheme, a 20% expenditure credit on qualifying expenditure, which is taxable, so the net benefit is 15% for a company paying the main rate and 16.2% for a loss-making company. Under ERIS, an extra 86% deduction, a total deduction of 186%, and a payable credit worth up to 14.5% of the surrenderable loss. See merged scheme and ERIS.
Who qualifies for ERIS?
Loss-making SMEs whose relevant R&D expenditure is at least 30% of total relevant expenditure. See ERIS.
Can the credit be paid in cash?
Yes. Under the merged scheme the credit is first set against Corporation Tax and the balance is paid, net of notional tax. Under ERIS the payable credit is 14.5% of the surrendered loss. In both cases payable credits are capped at £20,000 plus 300% of the company's relevant PAYE and National Insurance liabilities, with an exemption for companies whose staff create or manage intellectual property. See merged scheme.
Can we claim for subcontractors abroad?
For accounting periods beginning on or after 1 April 2024, relief for contracted out R&D and externally provided workers is generally limited to work carried out in the UK, with narrow exceptions. See subcontracting and overseas costs.
Claiming and deadlines
Do we have to tell HMRC before we claim?
In some cases. A claim notification is needed if you are claiming for the first time or your last claim was more than 3 years ago, within 6 months of the end of the period of account. See claim notification.
What is the additional information form?
A form, submitted before the Company Tax Return, that describes the R&D projects and breaks down the qualifying costs. It is required for every claim. See additional information form.
What is the deadline?
Within 2 years of the end of the accounting period the claim relates to. The claim is made, amended or withdrawn in the Company Tax Return. See deadlines.
Our accounting period began before 1 April 2024. Which rules apply?
The legacy SME scheme and RDEC, with their own rates and conditions. See legacy SME and RDEC.
Reviews
What happens if HMRC opens an enquiry?
HMRC asks detailed written questions about each project and each cost category, usually wants to speak to the competent professional, and may amend the claim and charge a penalty if it finds a careless inaccuracy. Records kept as the work happened answer most of it. Appeals go to statutory review and then the First-tier Tribunal. See HMRC compliance checks and reviews and audits.
What records should we keep, and for how long?
Project records that show the baseline, the advance sought, the uncertainties and the work done, kept by the people doing the work, plus time records and purchase records coded to projects. The records that support a Company Tax Return must be kept for 6 years from the end of the accounting period. See documentation.
Related pages
Official sources
Educational content only, not tax advice. See the disclaimer.