R&D tax relief questions, answered
Each of these is answered in full on a page of its own, and every answer names the legislation or the HMRC guidance it rests on rather than asking you to take it on trust. Where the statute and HMRC's published view do not sit flush, the page says so instead of rounding it off. Shorter versions of many of them sit in the FAQ, and our guides cover the same ground at length.
6 questions
What counts as R&D
The definition itself: the advance, the uncertainty, and who is qualified to say so.
- Can I claim R&D tax relief for a failed project?
Yes. The relief follows the attempt to resolve technological uncertainty, not the outcome.
- Who counts as a competent professional in an R&D claim?
A competent professional has relevant qualifications or experience in the project's field.
- What is a scientific or technological uncertainty?
It exists where a competent professional in the field cannot readily deduce whether something is feasible, or how to achieve it.
- What doesn't count as R&D for tax purposes?
Routine work, commercial novelty and problems a competent professional can readily solve.
- What qualifies for R&D tax credits?
R&D qualifies where a project seeks an advance in science or technology by resolving uncertainty.
- What are qualifying indirect activities?
Support work forming part of an R&D project — maintenance, admin, recruitment — is R&D under paragraph 31, so apportioned staff costs can be claimed.
7 questions
Who can claim, and company status
Which entities are inside the relief, and what size, ownership and group structure change.
- Can a sole trader claim R&D tax credits?
No. R&D tax relief is a corporation tax relief, so only companies can claim.
- What happens if my company outgrows the SME definition?
Size only changes after you cross the thresholds in two consecutive years, and the rule works both ways.
- Who can claim R&D tax relief?
Companies within the charge to UK corporation tax, carrying on a trade the R&D relates to.
- Can a partnership or LLP claim R&D tax credits?
Not in its own right. Where a member is a company, relief can reach it through its profit share, but HMRC's view is that no payable credit follows.
- Can a charity claim R&D tax relief?
No. A charity is an ineligible company under CTA 2009 s1142.
- How do linked and partner enterprises affect an R&D claim?
How group structure changes a claim: linked enterprises counted in full, partner enterprises in proportion, and connected companies aggregated for ERIS.
- Can a UK subsidiary doing cost-plus R&D for an overseas parent claim?
Usually yes. Where the overseas parent is not trading within the charge to UK tax, the UK subsidiary claims in its own right on its own costs.
6 questions
The schemes, and what a claim is worth
Which scheme applies, what it pays, and the limits that cap the cash.
- What is the 30% R&D intensity condition for ERIS?
How the intensity fraction works, what goes into the denominator, why connected companies count on both sides, and how the one-year grace period applies.
- What is the PAYE cap on R&D tax credits?
The PAYE cap limits a payable R&D credit to £20,000 plus 300% of the company's relevant PAYE and NIC.
- How much is an R&D tax relief claim worth?
Under the merged scheme, £100,000 of qualifying spend produces a £20,000 credit, worth £15,000 net at the 25% main rate.
- Is there a minimum R&D spend to claim?
No. The £10,000 minimum went for periods ending on or after 1 April 2012.
- Is there a maximum amount I can claim in R&D tax relief?
No. The merged scheme and ERIS set no ceiling on qualifying expenditure or the credit.
- Does the R&D expenditure credit reduce quarterly instalment payments?
No — it adds to them, by the tax on the credit and nothing more.
4 questions
Which costs go into a claim
The categories that carry most of the money, and the restrictions that sit on them.
- Can I claim R&D tax relief for subcontracted R&D?
Unconnected subcontractor costs qualify at 65% of the UK R&D portion, and the contract decides which side claims.
- Which software and cloud costs qualify for R&D tax relief?
Software used for R&D qualifies; data licences and cloud computing qualify for periods beginning on or after 1 April 2023.
- How do I calculate staff costs for an R&D claim?
Earnings, employer's NIC and pension contributions, apportioned to R&D time.
- Can I claim R&D tax relief on a prototype that is later sold?
Yes. Designing, building and testing the prototype qualifies, and a later sale does not undo it — but consumables that end up in the item sold drop out.
3 questions
Grants, subsidy and state aid
What other people’s money does to a claim, under rules that changed in April 2024.
- Does grant funding stop me claiming R&D tax relief?
No. For accounting periods beginning on or after 1 April 2024, grants including Innovate UK awards do not block or reduce R&D relief.
- Is R&D tax relief state aid?
No notified State aid machinery survives in the current schemes.
- What is subsidised expenditure for R&D tax relief?
Subsidised expenditure is R&D spending someone else paid for.
4 questions
Other reliefs, and how they interact
Where an R&D claim meets Patent Box, the venture capital schemes and the capital allowances code.
- Can I claim Patent Box and R&D tax relief together?
Yes. R&D relief works on what you spend; Patent Box taxes profits from qualifying patents at 10%.
- What are R&D allowances?
A 100% capital allowance for capital spending on R&D, under Part 6 of the Capital Allowances Act 2001.
- How does R&D tax relief affect the Patent Box nexus fraction?
The R&D fraction scales Patent Box profit by who did the research: (D+S1) x 1.3 over (D+S1+S2+A), capped at 1.
- Does claiming R&D tax credits affect EIS or SEIS status?
No. EIS and SEIS status, and VCT qualifying holdings, turn on what a company does and how big it is, not on what it receives from HMRC.
12 questions
Making a claim: process, deadlines and forms
The sequence a claim runs through, the dates that end it, and the forms that carry it.
- How far back can I claim R&D tax credits?
Generally two years from the end of your period of account. The last old-scheme deadlines fall in late March 2027, and many year ends have already closed.
- Do I need to tell HMRC before I make an R&D claim?
Companies with no R&D claim in the three years ending with the notification deadline must tell HMRC within six months of the period of account ending.
- What goes in the Additional Information Form?
Project descriptions, costs, the senior R&D contact and every agent.
- Can I get advance assurance for an R&D claim?
In limited circumstances. HMRC's advance assurance scheme covers eligible first-time SME claimants; the 2026 Targeted Advance Assurance pilot is narrower.
- What records do I need for an R&D claim?
No statutory format exists. HMRC accepts estimates built on evidence and reason; keep timesheets, project documents and test results as you go.
- How long does it take to receive an R&D tax credit payment?
HMRC's published aim is to pay 85% of payable tax credits within 40 days, or make contact within that time.
- How do I claim R&D tax credits?
Four steps: notify HMRC if required, prepare the technical and cost analysis, submit the Additional Information Form, then claim the relief in the CT600.
- How long does an R&D claim take to prepare?
Preparation time turns on your records, how many projects must be described and when your competent professionals are free.
- Do I need a technical report for an R&D claim?
Not as a separate document. The Additional Information Form makes project descriptions compulsory; a fuller R&D report is optional, and sometimes worth it.
- Does my R&D adviser have to be registered with HMRC?
Yes, if they deal with HMRC for you, phased from 18 August 2026 to 1 April 2027.
- What happens to my R&D claim if I change my accounting date?
A claim is made per accounting period, so a long set of accounts means two claims and two AIFs, under one notification deadline set by the accounts.
- How do I enter an R&D claim on the CT600 and CT600L?
Tick boxes 656 and 657, work the seven payment steps down the CT600L, then carry L210 to box 530, L125 to box 880 and L180 to box 875.
10 questions
Enquiries, penalties and disputes
What HMRC does after a claim is filed, and what happens when it disagrees with you.
- How likely is an HMRC enquiry into my R&D claim?
HMRC checked around one in six claims in 2023-24, its latest published figure — 9,700 compliance checks against roughly 61,000 claims received that year.
- What penalties can HMRC charge if an R&D claim is wrong?
Penalties turn on behaviour, not the size of the error. Reasonable care means no penalty at all; careless errors run to 30%; deliberate errors run higher.
- What will HMRC ask for in an R&D enquiry?
Technical explanations of each project, evidence of the scientific or technological uncertainties, a cost breakdown, staff time and project records.
- Can HMRC make me pay back an R&D tax credit?
Yes. HMRC can withhold a credit while it enquires, and can enquire into a claim it has already paid and require repayment, with interest and penalties.
- How long does an HMRC enquiry into an R&D claim take?
No statute sets a deadline for finishing an enquiry. What decides the length is what HMRC disputes — the stages, the routes out, and the remedy for delay.
- What happens if my R&D claim is rejected?
Rejected on procedure, cut back after a check, or still under enquiry: the routes differ.
- HMRC paid my R&D claim — does that mean it was approved?
No. HMRC processes most R&D claims when they are filed and asks its questions afterwards.
- What do HMRC's Guidelines for Compliance expect from an R&D claim?
GfC3 sets out how HMRC reads the R&D definition. It changes no law, but it states who counts as a competent professional and what a claim should record.
- What is an HMRC nudge letter about R&D, and what should I do?
A nudge letter is a standard HMRC letter asking you to check an R&D claim.
- How do I appeal an HMRC decision on an R&D claim?
Appeal to HMRC within 30 days, then choose: a statutory review usually answered in 45 days, or the First-tier Tribunal within 30 days of the review letter.
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