R&D Tax Credits Explained
UK companies claimed £7.6 billion in R&D tax relief in 2023-24 (HMRC, September 2025). If your business invests time and money to advance science or technology, you may be entitled to a share.
R&D tax credits are a UK government incentive that rewards companies for the cost and risk of innovation – whether that’s developing a new product, improving an existing process, or solving a genuine technical problem.
Since April 2024, most claims fall under the merged R&D Expenditure Credit (RDEC) scheme. This gives a 20% above-the-line credit on qualifying spend, worth a net 15-16.2% after tax.
Loss-making, R&D-intensive SMEs (those spending 30% or more of total costs on R&D) can claim under the more generous Enhanced R&D Intensive Support (ERIS) scheme – worth up to 27% as a payable cash credit.
For the latest announcements go to R&D News →
1. Is Your Business Conducting R&D?
You’d be surprised how much work qualifies. Check out some of the examples and case studies in the section below.
2. What Costs Can R&D Tax Relief Be Claimed On?
From staff and subcontractors to software, cloud computing and data licences – here’s what’s eligible.
2. What Costs Can R&D Tax Relief Be Claimed On?
From staff and subcontractors to software, cloud computing and data licences – here’s what’s eligible.
3. What Reward Are You Entitled To?
15-16% net benefit through the merged RDEC scheme – or up to 27% if you qualify as an R&D-intensive SME.
3. What Reward Are You Entitled To?
15-16% net benefit through the merged RDEC scheme – or up to 27% if you qualify as an R&D-intensive SME.
The UK R&D Tax Credit Scheme in Numbers
The latest HMRC statistics (published September 2025) for the 2023-24 tax year:
£7.6bn
Total R&D relief claimed in 2023-24
46,950
UK claims processed by HMRC
£46.1bn
Qualifying R&D expenditure
+33%
Average claim value (YoY)
The top three claiming sectors are Information & Communication (26% of claims), Manufacturing (26%), and Professional, Scientific & Technical (19%). London and the South East together account for nearly 40% of all claims.
Are You Conducting R&D?
R&D tax relief isn’t just for white-coat lab research. The HMRC test is whether your project sought to advance overall knowledge or capability in a field of science or technology by resolving scientific or technological uncertainty – the kind a competent professional in your field couldn’t have resolved off the shelf.
Companies in any industry may be eligible. Even if the project wasn’t successful, you can still claim – the qualifying activity is the attempt, not the outcome.
If you’re not sure whether your work qualifies, check the examples in the slider below or book a free 15-minute consultation. Find Out in 15 Minutes →
Could you be conducting R&D without knowing it?
Scroll through to find out what type of projects might apply.
R&D Tax Relief Case Studies
Here are some examples of clients we’ve helped with R&D tax relief. Whether you’ve spent £10,000 or £10,000,000 on R&D, we can help you get the benefit you deserve. To see more examples – Case Studies →
What Costs Can You Claim R&D Tax Relief On?
You can’t claim for all of your R&D expenditure. Costs that don’t directly relate to the R&D project – such as general payroll, accounting, sales or marketing – can’t be included. Here’s what is eligible.
For more detail on each cost category, read: R&D Tax Relief – Claimable Costs →
Staff costs — salaries, employer NIC, pension contributions and reimbursed business expenses for the time spent on R&D.What Costs Can You Claim R&D Tax Relief On?
You can’t claim for all of your R&D expenditure. Costs that don’t directly relate to the R&D project – such as general payroll, accounting, sales or marketing – can’t be included. Here’s what is eligible.
For more detail on each cost category, read: R&D Tax Relief – Claimable Costs →
What Reward Are You Entitled To?
There are two ways of benefiting from R&D tax relief. Either way, you’ll need to ask your accountant to submit or amend your corporation tax return for the accounting period in which the R&D took place.
1. Merged RDEC scheme (most companies, accounting periods from April 2024)
A 20% above-the-line credit on qualifying R&D expenditure, taxable at the main corporation tax rate. The net benefit is 15% for profitable companies (taxed at 25%) and 16.2% for loss-making companies (taxed at the notional 19% small profits rate).
2. Enhanced R&D Intensive Support (ERIS)
For loss-making SMEs where qualifying R&D is 30% or more of total expenditure. An 86% enhanced deduction is surrendered for a 14.5% payable cash credit, giving a net benefit of approximately 27%.
Pre-April 2024 periods
Older SME and RDEC rules still apply to accounting periods that began before April 2024. You can claim retrospectively for the most recent two accounting periods.
To estimate your own claim, use our calculator below.
What Reward Are You Entitled To?
There are two ways of benefiting from R&D tax relief. Either way, you’ll need to ask your accountant to submit or amend your corporation tax return for the accounting period in which the R&D took place.
1. Merged RDEC scheme (most companies, accounting periods from April 2024)
A 20% above-the-line credit on qualifying R&D expenditure, taxable at the main corporation tax rate. The net benefit is 15% for profitable companies (taxed at 25%) and 16.2% for loss-making companies (taxed at the notional 19% small profits rate).
2. Enhanced R&D Intensive Support (ERIS)
For loss-making SMEs where qualifying R&D is 30% or more of total expenditure. An 86% enhanced deduction is surrendered for a 14.5% payable cash credit, giving a net benefit of approximately 27%.
Pre-April 2024 periods
Older SME and RDEC rules still apply to accounting periods that began before April 2024. You can claim retrospectively for the most recent two accounting periods.
To estimate your own claim, use our calculator below.
Frequently Asked Questions
Who can claim R&D tax credits?
Any UK limited company that’s subject to Corporation Tax and has undertaken qualifying R&D can claim. That includes pre-revenue start-ups, established SMEs, and large companies. Sole traders and partnerships can’t claim – it’s a company relief.
What counts as qualifying R&D?
The HMRC test is whether your project sought to advance overall knowledge or capability in a field of science or technology by resolving scientific or technological uncertainty – the kind that a competent professional in your field couldn’t resolve without research. Routine work, market research and pure mathematics outside of qualifying activity don’t count.
Can I claim if the project failed?
Yes. The qualifying activity is the attempt to resolve uncertainty – not the outcome. Failed projects often produce the strongest narrative because the technical challenges are explicit.
How far back can I claim?
You can amend your CT600 for the two most recent accounting periods. If your year-end is 31 March, claims going back to 1 April 2024 are still in time until 31 March 2027.
Important — the Claim Notification Form (CNF). For accounting periods beginning on or after 1 April 2023, if you haven’t claimed R&D relief in any of the previous three accounting periods, you must submit a Claim Notification Form to HMRC within 6 months of the end of the accounting period. Miss this deadline and the claim is invalid – even if the work would otherwise qualify. If you’re a first-time claimant or you’ve skipped a few years, this is the critical date to diarise.
How long does a claim take?
Two stages, and the timing of each is in different hands.
Preparation. Once we have the information we need from you – technical narrative input, cost data and supporting records – we typically finalise the R&D report and Additional Information Form and make the submission within 2-3 weeks.
Processing. HMRC’s published target is to pay the R&D credit within 40 days of submission. In practice most claims settle within 4-8 weeks; claims selected for compliance checks take longer.
So a typical end-to-end timeline from “all info received” to “money in the bank” is around 6-10 weeks.
Do I need to file an Additional Information Form?
Yes – HMRC’s Additional Information Form (AIF) has been mandatory for all R&D claims since 8 August 2023. Claims submitted without it are rejected. We handle the AIF as part of every claim we prepare.
What’s changed since April 2024?
The old SME and RDEC schemes have been replaced by a single merged RDEC scheme for most claimants, plus the ERIS scheme for loss-making R&D-intensive SMEs. Subcontracted R&D rules have changed (broadly, the company directing the R&D claims), and most overseas costs are no longer eligible.
Ready to find out what you could claim?
Book a free 15-minute consultation. We’ll tell you whether your work qualifies, what you can claim, and the next steps – no obligation.
