R&D tax relief: the complete guide

UK R&D tax relief now runs through two schemes. For accounting periods beginning on or after 1 April 2024, most companies claim the merged R&D expenditure credit: a 20% credit worth 15p per £1 of qualifying spend at the 25% corporation tax rate, 16.2p for loss-makers and companies paying tax at 19%, and as low as 14.7p where marginal relief applies. Loss-making SMEs whose relevant R&D expenditure is at least 30% of their total relevant expenditure can claim Enhanced R&D Intensive Support (ERIS) instead, worth up to 26.97p per £1 in cash.

The relief comes with a compliance regime to match. First-time claimants, and companies returning after a gap in claims, must notify HMRC within six months of the end of the period of account, every claim needs an Additional Information Form, and HMRC checked around one in six claims in 2023-24, its latest published figure. This page collects our guides to all of it, each written and reviewed by a chartered adviser.

Start with your situation

New to R&D tax relief. Begin with what counts as qualifying R&D, then which costs qualify, then which scheme applies to your company. Read the claim notification requirement early: for a first claim, the deadline can pass before anyone mentions R&D relief to you.

Already claiming. The rules changed substantially for accounting periods beginning on or after 1 April 2024. Check your position against the merged scheme, and if you hold grant funding, read grant funding and R&D tax relief: the old restrictions are gone, and much of the advice still published online is out of date.

Worried about an enquiry. Start with HMRC R&D enquiries: what to expect, how the process runs and how to respond. Enquiry support is included in every LimestoneGrey engagement as standard; if the claim under enquiry was prepared by someone else, HMRC enquiry defence is the standalone engagement that covers it. If you already suspect a past claim was wrong, voluntary disclosure sets out what coming forward first is worth.

Loss-making and R&D-intensive. You may be entitled to the most generous rate in the system. Read the ERIS guide and test yourself against the 30% threshold with the ERIS intensity calculator.

In financial difficulty. The going concern condition decides whether a merged-scheme credit arrives as cash and whether an ERIS claim can be made at all, and the order of events matters: R&D tax relief when a company is in trouble sets out what to do before an administrator or liquidator is appointed, and what can still be claimed afterwards.

The schemes

• The merged R&D scheme explained: the 20% credit, the net benefit by tax position, the standard worked example and the PAYE cap.

• Enhanced R&D Intensive Support (ERIS): the 186% deduction, the 14.5% payable credit and how the 30% intensity test really works.

• Which R&D scheme applies to your company?: the decision page, by accounting period start date, profit position and intensity.

• R&D tax relief rates by year: every SME and RDEC rate from 2015 onwards, and what each was worth per £1 of qualifying spend.

• R&D tax relief worked examples: five claims calculated in full — profitable, marginal-rate and loss-making merged scheme, ERIS, and a project that qualifies for nothing.

• HMRC’s R&D statistics, explained: what the annual release measures, the trend lines that matter, and what the latest one showed.

• Accounting for the merged credit under FRS 102: above the line, what lands in the tax charge, and the judgement calls to settle with the auditor.

• R&D tax credits under FRS 105, IFRS and FRS 101: where the treatment differs from FRS 102.

• Auditing the R&D tax credit: what auditors ask, assertion by assertion, and what a well-prepared claim answers.

What qualifies

• What counts as qualifying R&D?: the DSIT definition in plain terms: the advance, the uncertainty and the competent professional test.
• Which costs qualify for R&D tax relief?: staff, subcontractors, consumables, software, data and cloud, and what falls outside a claim.
• Grant funding and R&D tax relief: why grants no longer block or reduce relief under the current schemes.

Compliance and deadlines

• The R&D claim notification requirement: the six-month deadline that silently invalidates late first claims.
• The R&D Additional Information Form (AIF): what HMRC requires with every claim and where forms go wrong.
• HMRC R&D enquiries: the process, the timescales honestly stated, and how defensible preparation changes the outcome.
• R&D voluntary disclosure: what to do when a past claim was too high and the return can no longer be amended.
• R&D tax relief deadlines: every date, from the legislation: the filing date, the claim window, notification, the AIF, enquiry and discovery windows, with worked examples.
• R&D tax case law: the tribunal decisions: one cited entry per decision — what was at issue, who won, and what it changes for a claim being prepared now.
• Backdated claims and the March 2027 deadline: the closing window for claims under the old SME and RDEC schemes.

Contracts and cross-border work

• Contracted-out R&D: who claims?: the intended-or-contemplated test and why contract wording decides the claim.
• Overseas R&D costs under the merged scheme: the UK-only default and the narrow exception for R&D that can only be done overseas.

Groups, deals and distress

• R&D tax relief in groups: connected companies, surrender and who claims: why every group company claims separately, how connected-party costs are capped, and where the credit or the loss can be moved.
• R&D tax relief in due diligence: what a buyer’s tax due diligence tests, and how the deal itself moves SME status and the intensity ratio.
• R&D tax relief when a company is in trouble: going concern, what an administrator or liquidator can still claim, and why the merged scheme and ERIS diverge.

The rules, sector by sector

The legislation is the same whatever you build, but the arguments that decide a claim are not. Where the boundary falls in software development is a different question from proving an advance in life sciences or biotech, and different again for the contract analysis that runs through aerospace and defence or the trial records behind a manufacturing claim. Our sector guides set out the complication we meet most often in each.

Quick answers and tools

Shorter questions are answered in the FAQ. Terms defined in one line each, with a link to the guide behind every one, are in the R&D tax relief glossary. For working estimates on your own numbers, use the claim value calculator, the ERIS intensity calculator or the claim notification deadline checker — all free, and collected on our tools page.

If you would rather talk than read, talk it through with a chartered adviser. We will tell you which scheme applies, what a claim would involve and whether it is worth making, and the fee is agreed before any work starts.

Written by Matthew Jones ACA CTA. Last reviewed August 2026.