This track is for finance managers, tax leads and accountants preparing a United Kingdom R&D tax relief claim in-house. For accounting periods beginning on or after 1 April 2024, most companies claim under the merged R&D expenditure credit scheme; loss-making SMEs that are R&D intensive can claim enhanced R&D intensive support (ERIS) instead. Both are administered by HM Revenue and Customs. Three things change the program's shape: a claim notification window, an additional information form that must precede the Company Tax Return, and a taxable credit, so the company keeps less than the headline 20%.
How the United Kingdom rules change the program
| Module | What is different in the United Kingdom | Country page |
|---|---|---|
| Scheme mechanics | Merged scheme: 20% expenditure credit on qualifying expenditure, taxable. ERIS: an extra 86% deduction (a total deduction of 186%) and a payable credit worth up to 14.5% of the surrenderable loss. | Merged scheme |
| Cost capture | Listed categories: staffing costs, externally provided workers, contracted out R&D, consumable items, software, data licences and cloud computing,. Capital expenditure does not qualify. | Eligible expenditure |
| Staff time apportionment | Staffing costs comprise earnings, employer Class 1 National Insurance contributions and employer pension contributions for directors and employees directly and actively engaged in R&D, apportioned where only partly so engaged. | Eligible expenditure |
| Contractors and overseas costs | 65 percent of payments to an unconnected staff provider or subcontractor qualify. Relief for contracted out R&D and externally provided workers is generally limited to work carried out in the UK. | Subcontracting and overseas costs |
| Grants and subsidised expenditure | The merged scheme contains no restriction for subsidised or grant-funded expenditure. Under the legacy SME scheme, subsidised expenditure could not be claimed and was eligible for RDEC instead. | Legacy SME and RDEC |
| Calculations | Notional tax on the credit is deducted at the main rate (25 percent), giving a net benefit of 15 percent, or at the small profits rate (19 percent) for loss-making companies, giving 16.2 percent. Payable credits are capped at £20,000 plus 300% of relevant PAYE and National Insurance liabilities. | ERIS R&D intensive SME |
| Working with technical teams | A project qualifies if it seeks an advance in science or technology by resolving scientific or technological uncertainty. | Additional information form |
| Filing and deadlines | Claim notification within 6 months of the end of the period of account where required; additional information form with every claim; claim in the Company Tax Return within 2 years of the end of the accounting period. | Deadlines |
| Reviews and audits | HMRC selects R&D claims for compliance checks on a risk basis using the information on the additional information form and other data. | HMRC compliance checks |
Forms and deadlines
| Form or step | Timing | Country page |
|---|---|---|
| Claim notification form | Within 6 months of the end of the period of account, if required. Where required and not made in time, the company is not entitled to make an R&D claim for the accounting period. | Claim notification |
| Additional information form | Before the Company Tax Return, with every claim including amended claims. If it is not submitted first, HMRC will remove the R&D claim from the return. | Additional information form |
| CT600 with supplementary page CT600L | The claim, submitted online; made, amended or withdrawn within 2 years of the end of the accounting period it relates to. | How to claim |
| Enquiry window and records | An enquiry can be opened within 12 months of the date the return was delivered for most companies, or of the filing date for members of large groups. Records are kept for six years from the end of the accounting period. | HMRC compliance checks |
Key rules to know
Put the notification date in the close calendar. The claim notification period runs from the first day of the period of account to the date six months after the last day of the period of account. A company is exempt if it made an R&D claim in an accounting period ending within the three years before the last date of the notification period.
The form names people and projects. The additional information form requires the details of any agent who advised on the claim and the senior officer responsible for it, and qualifying expenditure by category and by project: all projects where there are 1 to 3, otherwise enough to account for at least 50 percent of the qualifying expenditure, with a minimum of 3 and a maximum of 10.
Overseas work needs a reason the UK cannot supply. Overseas contracted out R&D or EPWs qualify only where conditions necessary for the R&D are not present in the UK, are present where the work is done, and it would be wholly unreasonable to replicate them in the UK; cost and availability of workers are not qualifying reasons.
Worked example
Illustrative example. Pennine Sensors Ltd, a hypothetical company with a year to 31 March 2026, is claiming for the first time, so the merged scheme applies. The finance team submits the claim notification by 30 September 2026, then builds the qualifying expenditure.
| Cost | Amount | Treatment | Qualifying |
|---|---|---|---|
| Engineers on the two projects (earnings, employer NIC and pension) | £400,000 | Staffing costs | £400,000 |
| Technical director, 50% directly and actively engaged | £120,000 | Staffing costs, apportioned | £60,000 |
| Agency test engineer, unconnected, working in the UK | £100,000 | Externally provided worker, 65 percent | £65,000 |
| UK design house under contract, unconnected | £60,000 | Contracted out R&D, 65 percent | £39,000 |
| Prototype materials and cloud test environments | £36,000 | Consumable items and cloud computing | £36,000 |
| Test equipment purchased | £50,000 | Capital: research and development allowances instead | 0 |
| Total qualifying expenditure | £600,000 |
The expenditure credit is 20% of £600,000, which is £120,000. Pennine pays Corporation Tax at the main rate, so notional tax of 25 percent, £30,000, is deducted, leaving a net benefit of £90,000, or 15 percent of qualifying expenditure.
Had Pennine been a loss-making SME with an intensity ratio of 40%, above the 30% condition, ERIS would give an extra 86% deduction of £516,000 and, if the unrelieved trading loss were at least £1,116,000, a payable credit of 14.5% of that, £161,820, the maximum ERIS cash benefit of 26.97 percent of qualifying expenditure, subject to the PAYE cap. Under the merged scheme the same loss-making company would keep 16.2 percent, £97,200.
Related country guide pages
Self-check questions
Answer each question, then open it to compare.
Your company has never claimed R&D tax relief and its period of account ended on 31 March 2026. What must happen by 30 September 2026, and what is the consequence of missing it?
Qualifying expenditure is £600,000 and the company pays Corporation Tax at the main rate. What is the expenditure credit and what does the company keep?
Which three elements make up staffing costs, and how is a technical director who spends half her time on the projects treated?
A UK company pays an unconnected software house in another country £100,000 for contracted out R&D because the developers there are cheaper. How much qualifies for an accounting period beginning on or after 1 April 2024?
What does the additional information form require for each project described, and how many projects must be described?
For how long can HMRC open an enquiry into a Company Tax Return filed on time, and how long must the supporting records be kept?
Official sources
- R&D tax relief: the merged R&D expenditure credit scheme and enhanced R&D intensive supportGOV.UK
- Tell HMRC you want to claim R&D tax reliefGOV.UK
- Submit detailed information before you claim R&D tax reliefGOV.UK
- CIRD181000: claims process overviewHMRC internal manual
- Finance Act 1998, Schedule 18 (Company Tax Returns, enquiries and time limits)legislation.gov.uk
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Educational content only, not tax advice. See the disclaimer.