R&D tax hub

R&D tax relief, explained end to end

One place for the whole picture: which claim type applies to you, what your spend is realistically worth, how grants interact with relief, and the questions finance leads ask us most.

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Compare the claim types

Almost every UK claim now runs through one of these routes. The right one depends on your tax position, your R&D intensity and who carried the technical risk.

Claim type	Who it is for	What it is worth	How it is paid	Grant interaction
Merged R&D expenditure credit	Most UK limited companies, profit making or loss making, whatever their size.	20% above the line credit, worth roughly 15.0% to 16.2% of qualifying spend after tax.	Taxable credit set against corporation tax, with any balance payable in cash.	Grant funding does not restrict the claim. No project splitting required.
Enhanced R&D Intensive Support (ERIS)	Loss making SMEs where qualifying R&D is at least 30% of total expenditure.	An 86% enhancement plus a 14.5% payable credit, worth up to around 27.0% of qualifying spend in cash.	Cash credit, which is why it suits pre revenue companies burning through runway.	Generally not notified state aid, though a de minimis limit applies to Northern Ireland registered claimants.
Subcontracted and grant funded R&D	Companies doing R&D under contract for others, or delivering grant funded projects.	Depends on who carried the technical risk and intended the R&D. Get this wrong and the claim sits with the wrong company.	Claimed through whichever scheme the claimant company qualifies for.	Grant income is recorded, but the credit is calculated on qualifying expenditure however the project was funded.

Merged R&D expenditure credit

Who it is for: Most UK limited companies, profit making or loss making, whatever their size.
What it is worth: 20% above the line credit, worth roughly 15.0% to 16.2% of qualifying spend after tax.
How it is paid: Taxable credit set against corporation tax, with any balance payable in cash.
Grant interaction: Grant funding does not restrict the claim. No project splitting required.

Enhanced R&D Intensive Support (ERIS)

Who it is for: Loss making SMEs where qualifying R&D is at least 30% of total expenditure.
What it is worth: An 86% enhancement plus a 14.5% payable credit, worth up to around 27.0% of qualifying spend in cash.
How it is paid: Cash credit, which is why it suits pre revenue companies burning through runway.
Grant interaction: Generally not notified state aid, though a de minimis limit applies to Northern Ireland registered claimants.

Subcontracted and grant funded R&D

Who it is for: Companies doing R&D under contract for others, or delivering grant funded projects.
What it is worth: Depends on who carried the technical risk and intended the R&D. Get this wrong and the claim sits with the wrong company.
How it is paid: Claimed through whichever scheme the claimant company qualifies for.
Grant interaction: Grant income is recorded, but the credit is calculated on qualifying expenditure however the project was funded.

Rates and thresholds are set by HMRC and can change at a Budget. We confirm the rules that apply to your accounting period before we quote.

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Estimate what your R&D is worth

Enter the costs behind your technical work for one accounting period. We apply the current UK rules, including the 65% restriction on unconnected subcontractors, and show the working.

Where is the company financially?

Staff costs on R&D

Gross salary, employer NI and pension for the time spent solving the technical uncertainty.

Subcontractors and externally provided workers

UK-based subcontractors only. Usually claimable at 65% of the invoice for unconnected parties, which we apply for you.

Software, cloud and data

Licences, compute and datasets used directly in the R&D, apportioned to the project.

Consumables and materials

Materials, reagents, prototypes and a fair share of light, heat and power.

Clinical trial volunteers and other qualifying costs

Payments to trial participants and other categories HMRC allows.

Does the work qualify? Five questions HMRC will ask.

Were you resolving a technical or scientific uncertainty a competent professional could not simply look up?
Was the work aiming at an advance in the field, not just new to your company?
Was the work carried out mainly in the UK, or by UK-based staff and contractors?
Is the claimant a UK limited company paying corporation tax?
Can you evidence the project timeline, the people involved and the costs?

What you can put in a claim

Staff costs: gross pay, employer NIC and pension for time spent on the R&D.
Externally provided workers and UK based subcontractors, usually restricted to 65% of the invoice for unconnected parties.
Software licences, datasets and cloud compute used directly in the qualifying work.
Consumables and materials transformed in the R&D, plus a fair share of power, water and fuel.
Payments to clinical trial volunteers, which matters for most life science and medtech claims.

R&D tax questions we answer every week

What qualifies as R&D for tax purposes?

The project must seek an advance in overall science or technology by resolving uncertainty that a competent professional in the field could not readily resolve. Commercial novelty is not enough. Building a product is not automatically R&D, but solving the parts nobody could tell you how to solve usually is.

Who can claim?

Any UK limited company within the charge to corporation tax, profitable or loss making. Sole traders and traditional partnerships cannot claim. Most companies now claim under the merged scheme, with loss making R&D intensive SMEs claiming through ERIS instead.

How far back can we claim?

Usually the two most recent completed accounting periods, measured as two years from the end of the period in which the spend was incurred. Once that window closes, the costs cannot be reclaimed. First time claimants may also need to notify HMRC in advance, within six months of the period end.

Does a grant reduce the claim?

Not under the merged scheme. The credit is calculated on qualifying expenditure however the project was funded, so there is no need to carve out a subsidised proportion. Planning the grant and the claim together still produces a better result than optimising either alone.

Can we claim for overseas work?

Broadly no. Externally provided workers and subcontracted R&D are restricted to UK based work under the current territorial rules, with narrow exceptions where the conditions genuinely cannot be replicated in the UK.

How likely is an HMRC enquiry?

Compliance activity has risen sharply and weak narratives are the usual trigger. We write the report on the assumption it will be read closely, and if HMRC opens an enquiry into a claim we prepared, we handle the correspondence.

How are you paid?

A fixed fee agreed before we start, quoted against the size and complexity of the claim. No percentage of your credit, no equity, no lock in on future years.

Find out what your R&D is worth

Book a free 20-minute review. We will confirm which claim type applies, the qualifying costs and whether the claim is worth making at all.

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