R&D tax relief · Director guide · Updated June 2026

R&D tax credits UK explained: how they work in 2026.

Written by Iftikhar Rashid FCCA — Managing Partner, RR Accountants. 16 years in practice.

What are R&D tax credits?

R&D tax relief allows UK companies chargeable to Corporation Tax to claim relief on qualifying projects that seek an advance in science or technology and resolve genuine scientific or technological uncertainty. For accounting periods beginning on or after 1 April 2024, most claims use the merged RDEC-style scheme; eligible loss-making R&D-intensive SMEs may use ERIS. Claims must be supported by contemporaneous technical evidence and an Additional Information Form (AIF). Sources: gov.uk. See also merged scheme and ERIS guidance.

Post-2024 landscape: The relief still matters, but weak claims are easier to reject. We only claim where the activity genuinely qualifies and the evidence can support the position.

Does your activity qualify for R&D relief?

Likely to qualify

  • ✓Building software that solves a previously unsolved technical problem
  • ✓Developing new manufacturing processes or materials
  • ✓Creating novel algorithms where existing solutions don't exist
  • ✓Medical device or diagnostic technology development
  • ✓Engineering solutions involving genuine technical uncertainty
  • ✓Biotech, pharma, or life sciences research

Does NOT qualify

  • ✕Routine software development using existing frameworks
  • ✕Building a website or app using established technology
  • ✕Market research or feasibility studies
  • ✕Aesthetic design and UX work
  • ✕Adapting an existing product for a new market
  • ✕Business process improvements without technical innovation

The test is not "did we develop something?" — it is "did we face and overcome a scientific or technological uncertainty that a competent professional could not resolve without research?"

What changed for current R&D claims

SME enhanced deduction rate reduced

Before April 2023: SMEs could deduct 230% of qualifying R&D spend (130% enhancement). After April 2023: reduced to 186% (86% enhancement). Loss-making SME tax credit rate also reduced.

RDEC rate increased to 20%

The Research and Development Expenditure Credit rate was increased from 13% to 20% for expenditure on or after 1 April 2023.

Merged scheme from April 2024

For accounting periods beginning on or after 1 April 2024, a merged RDEC-style scheme applies to most R&D claims. Enhanced R&D Intensive Support (ERIS) can apply to eligible loss-making R&D-intensive SMEs.

Additional Information Form (AIF) required

From August 2023, all R&D claims require an AIF filed online before the CT600. The AIF requires project descriptions, qualifying cost breakdowns, and named responsible individuals. Missing AIFs result in claims being rejected.

Advance registration for some claimants

First-time claimants (and those who have not claimed in the preceding three years) must notify HMRC in advance that they intend to claim R&D relief, within 6 months of the end of the accounting period.

R&D tax credits — FAQs

What are R&D tax credits?

R&D (Research and Development) tax relief allows UK limited companies to claim tax relief on qualifying R&D expenditure where a project seeks an advance in science or technology and resolves genuine scientific or technological uncertainty. For accounting periods beginning on or after 1 April 2024, most claims use the merged RDEC-style scheme, while eligible loss-making R&D-intensive SMEs may use ERIS. See gov.uk/guidance/corporation-tax-research-and-development-rd-relief.

What qualifies as R&D for HMRC purposes?

HMRC's definition is specific. Qualifying R&D must: (1) seek to advance overall knowledge or capability in science or technology; (2) involve overcoming scientific or technological uncertainty that could not be resolved by a competent professional in the field; (3) be directly related to the company's trade. Routine software development, aesthetic design work, and market research do not qualify. The activity must involve genuine technical uncertainty — not just business uncertainty.

What changed with R&D relief from April 2024?

For accounting periods beginning on or after 1 April 2024, the previous SME and RDEC routes were replaced for most companies by a merged RDEC-style scheme. A separate Enhanced R&D Intensive Support (ERIS) route can apply to eligible loss-making R&D-intensive SMEs. Transitional rules can still matter, so the accounting period and expenditure dates must be checked before claiming.

What costs qualify for R&D tax relief?

Qualifying costs include: staff costs (salaries, employer NI, pension contributions) directly engaged in R&D; subcontractor costs (with restrictions); consumable materials used in R&D; software costs; and some utility costs. Since April 2023, data and cloud computing costs are eligible in some circumstances.

Why has HMRC increased scrutiny of R&D claims?

HMRC now requires more detailed claim information and is challenging weak or poorly evidenced claims more actively. All R&D claims need an Additional Information Form, some companies must submit claim notification in advance, and claims without contemporaneous technical evidence are exposed if HMRC asks questions.

What is the Additional Information Form (AIF) for R&D?

Since August 2023, all R&D claims must be accompanied by an Additional Information Form (AIF) filed online before the CT600 is submitted. The AIF requires: contact details for the agent making the claim; a description of the R&D activities (project-by-project for larger claimants); the qualifying cost breakdown; and identification of the named individuals responsible. Missing or inadequate AIFs result in HMRC rejecting the claim.

Should we use a specialist R&D claims firm or our accountant?

R&D should be joined to the Corporation Tax return, the accounting records, and the technical evidence. A well-documented claim prepared with your accountant, based on contemporaneous records, is usually more defensible than a claim maximised in isolation but unsupported by evidence.

Related guides

Source: gov.uk — R&D relief. Not personalised advice.

R&D claims

We only claim R&D where it genuinely qualifies.

We screen every limited company client annually and prepare the technical narrative, qualifying cost schedule, and AIF. No contingency fees. No speculative claims.

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Iftikhar Rashid FCCA · 16 years · Specialist in limited company directors