R&D tax credits UK
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.
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.
Entitlement calculator
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.
Gross salary, employer NI and pension for the time spent solving the technical uncertainty.
UK-based subcontractors only. Usually claimable at 65% of the invoice for unconnected parties, which we apply for you.
Licences, compute and datasets used directly in the R&D, apportioned to the project.
Materials, reagents, prototypes and a fair share of light, heat and power.
Payments to trial participants and other categories HMRC allows.
Does the work qualify? Five questions HMRC will ask.
R&D funding is money that helps UK companies pay for research and development: work that tries to solve a scientific or technological problem nobody has yet solved. It comes in two main forms, and the strongest funding plans use both.
Competitive funding awarded before the work starts, mainly through Innovate UK and Horizon Europe. Grants usually cover part of the project cost, so your company co-invests the rest, typically 30% to 50% as match funding.
Relief claimed after the spend, through your corporation tax return. Any eligible UK company can claim, with no competition, under the merged scheme or ERIS for loss making R&D intensive SMEs.
Not sure which route fits? Browse live grants or book a scoping call.
R&D funding is financial support for research and development that seeks a genuine advance in science or technology. In the UK it comes mainly from competitive grants, such as Innovate UK and Horizon Europe, and from R&D tax credits claimed through your corporation tax return.
Grants are won by applying to an open competition that fits your project, with a written application scored by independent assessors. R&D tax credits are claimed after the spend by any eligible company. Many companies use a grant to start a project and tax credits to recover part of their own share.
A grant is awarded competitively before the work starts and pays a share of agreed project costs. R&D tax credits are not competitive: any qualifying UK company can claim them after the spend, as a reduction in corporation tax or a cash payment. Under the merged scheme you can benefit from both on the same project.
Yes. Innovate UK grants are open to early stage companies, provided they can fund their share of the costs. Loss making R&D intensive SMEs can also receive a payable tax credit in cash through ERIS, so a startup does not need profits to benefit.
No. Grants and R&D tax credits are non-dilutive and are not repaid, provided you meet the grant terms and the claim is accurate. Innovate UK also offers innovation loans, which are repaid, so check which product a competition offers.
The UK has two main R&D tax incentives for companies. The merged R&D expenditure credit is a taxable credit of 20% of qualifying spend, available to most companies whether profit making or loss making. Enhanced R&D Intensive Support (ERIS) gives loss making SMEs that spend a high share of their costs on R&D a larger payable credit. Patent Box is a related incentive that lowers the corporation tax rate on profits from patented inventions. Grant funded projects can still claim, under specific rules.
A claim runs in five steps. Identify the qualifying projects and the boundary of the qualifying work. Gather the costs by category and agree an apportionment method. Write the technical narrative in the terms HMRC assesses: baseline, uncertainty, advance and competent professional. Submit the mandatory additional information form before or with the corporation tax return. Then include the claim in the CT600 and the tax computation. New claimants must also file a claim notification form within six months of the period end, before any of this.
Preparing a well evidenced claim usually takes two to four weeks of elapsed time, most of which is waiting on technical interviews and cost data. Once filed, HMRC aims to process most payable claims within a few weeks, though payments can take longer at busy periods or where the claim is selected for a compliance check. Building the claim properly the first time is the fastest route to payment.
Under the merged R&D expenditure credit, a 20% above the line credit is worth roughly 15.0% to 16.2% of qualifying spend after tax. Loss making R&D intensive SMEs claiming through ERIS can receive up to around 27.0% of qualifying spend in cash. The calculator on this page models both from your own numbers.
The merged R&D expenditure credit is the default route for almost every UK company, profit making or loss making, whatever its size. Enhanced R&D Intensive Support is an alternative for loss making SMEs whose qualifying R&D is at least 30% of total expenditure, and it usually produces more cash for a pre revenue company. Both cannot be used for the same expenditure, so the right answer depends on your tax position and intensity in the period.
You must notify HMRC in advance if your company has never claimed R&D relief, or has not claimed in the three years before the last day of the notification period. The deadline is six months after the end of the accounting period, and there is no discretion for lateness. Miss it and relief for that period is lost entirely, not reduced.
A mandatory online submission that must reach HMRC before or at the same time as the corporation tax return carrying the claim. It sets out the cost breakdown, a named senior internal officer, any agent involved, and descriptions of the qualifying projects. If it is missing, HMRC removes the R&D claim from the return.
It can, but the advance must be in computer science or software engineering as a field, not simply new to your company. Novel algorithms, machine learning under genuine technical uncertainty, distributed systems beyond standard patterns and hardware integration usually qualify. Interface work, routine integration of documented APIs, configuration and building apps with established tooling usually do not.
Yes. Under the merged scheme grant funding no longer restricts the claim, because the credit is calculated on qualifying expenditure however the project was funded. There is no need to split the project or carve out a subsidised proportion. Planning the grant and the claim together still produces a better outcome, which is why the same team handles both here.
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.
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.
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.
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.
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.
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.
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.
What qualifies, who can claim, how far back you can go and how a claim is put together.
Read moreTechnical scoping, cost analysis, an HMRC ready report and enquiry support, written by engineers and scientists.
Read moreSize your entitlement in about two minutes, with the qualification tests alongside it.
Read moreHow a 10% effective rate on patent derived profits stacks on top of R&D relief.
Read morePairing a grant with relief is usually the strongest non dilutive position. Browse live UK grant opportunities or read how subsidy control and de minimis affect the two together.
We defend claims through enquiry, including claims written by other advisers. See how HMRC R&D enquiry defence works.
Three recent claims, anonymised at the clients' request. Sector, scheme and recovered amounts are real.
£96,000
CleanTech hardware company (name withheld)
Clean tech: advanced hardware
Read the case study
£218,000
MedTech company (name withheld)
Life sciences: medical devices
Read the case study
£142,000
B2B AI software company (name withheld)
AI / software: enterprise machine learning
Read the case studyBook a free 20-minute review. We will confirm which claim type applies, the qualifying costs and whether the claim is worth making at all.
