AI and robotics companies do some of the clearest qualifying R&D in the UK, and file some of the most scrutinised claims. Genuine development work on models, perception, control systems and physical integration qualifies readily, and is worth between 15p and 26.97p per £1 of qualifying spend depending on the scheme. But HMRC examines software and AI claims closely, so the work has to be framed as an advance in the field of science or technology, and evidenced like one.
What AI development qualifies as R&D?
Development that pushes past what a competent professional could achieve with published knowledge and established techniques. In practice that includes:
- Novel model architectures or training methods, developed because existing approaches cannot meet the accuracy, latency or safety constraints of the problem.
- Making models work under hostile data regimes: scarce labels, heavy class imbalance, distribution shift between training and deployment.
- Deployment engineering that is genuinely unresolved, such as running inference within hard power or memory budgets on edge hardware.
What does not qualify is just as important. Fine-tuning an available model with standard tooling to ship a product feature is commercial development, however valuable: it is new to your company, not to the field. We draw this line in detail in when machine learning development qualifies as R&D.
What robotics development qualifies as R&D?
Robotics claims usually rest on integration and environment uncertainty. Components that each work to specification can still produce a system whose behaviour cannot be predicted: perception, planning and actuation interact, and the real world refuses to match the simulator. Qualifying work typically includes control systems for unstructured environments, closing the gap between simulation and physical performance, and prototype iterations where each build tests a hypothesis the last one raised.
The iteration record is the evidence: what was tried, what failed, and why the next build changed. We cover this in robotics prototyping and technological uncertainty.
How closely does HMRC look at AI and robotics claims?
Closely, and it would be wrong to pretend otherwise. HMRC checks roughly one in six R&D claims, and software-based claims have attracted particular attention through the compliance push of recent years. The recurring failure is framing: claims written around the product and the market rather than the technological uncertainty.
A defensible AI claim reads like the competent professional’s account. It names the constraint that existing techniques could not meet, the approaches tried, the experiments run and the failures kept. Our page on HMRC R&D enquiries explains what a check involves and how we defend claims, including claims filed by other advisers.
Which scheme applies, and what is it worth?
Pre-revenue AI and robotics companies are exactly who Enhanced R&D Intensive Support (ERIS) was designed for. A loss-making SME whose R&D expenditure is at least 30% of its total expenditure receives up to 26.97p per £1: a £26,970 payable credit on £100,000 of qualifying spend. Deep in the development phase, most of the burn is R&D and the intensity test is often passed comfortably; a one-year grace period protects a qualifying company whose intensity later dips.
Profitable companies claim under the merged scheme: a 20% credit that nets to £15,000 on £100,000 of spend at the 25% corporation tax rate, or £16,200 where the 19% rate applies. The ERIS intensity calculator works the 30% ratio including connected companies, and the claim value calculator estimates both schemes.
Four issues that recur in AI and robotics claims
Compute and data costs qualify. Cloud computing and data licence costs are qualifying categories under the current schemes, which matters when training runs are a large share of spend. Staff costs are apportioned to R&D time.
Overseas development largely does not. Subcontractor payments qualify only where the R&D is undertaken in the UK, and externally provided workers only where they are subject to UK PAYE and Class 1 NIC. A distributed engineering team is a structural question to address before the claim, not after it.
The PAYE cap can bite small payrolls. Payable credits are capped at £20,000 plus 300% of relevant PAYE and NIC. There is an exemption where the company is creating or managing intellectual property and connected-party subcontracting is low, which many genuine AI and robotics developers meet, but it needs checking rather than assuming.
Grants no longer reduce the claim. The old subsidised-expenditure restriction is abolished for current-scheme periods: an Innovate UK funded project claims in full under the merged scheme or ERIS. Our guide to grant funding and R&D tax relief has the detail.
What our AI and robotics clients say
“Working with LimestoneGrey has been a genuinely positive experience. Their communication is clear and proactive and they are always on hand to answer queries and provide reassurance throughout the process. We have complete trust in their expertise and feel confident that our claims are being handled professionally.”
Dr Varghese, Laennec AI Limited
“We have been very happy with the service provided by LimestoneGrey. In particular, their attention to detail has been exceptional, making the entire process smooth and reassuring for us.”
Marcus, Neurabotics Limited
Talk to a chartered specialist
LimestoneGrey is a firm of chartered tax advisers and chartered accountants specialising in R&D tax relief regulated by ICAEW, focused on R&D-intensive companies, with advanced AI and robotics among our core sectors. Every claim is prepared by our specialist team and signed off by a chartered adviser, enquiry support is included as standard, and the fee is agreed before any work starts.
If you want a straight answer on whether your development qualifies, how the intensity test falls on your numbers, or how to evidence a claim HMRC may check, get in touch.
Written by Matthew Jones ACA CTA. Last reviewed July 2026.