Reduce your Corporation Tax bill — or get cash back from HMRC — for the research and development your company is already doing.
Get Your Instant Quote →R&D tax relief is a UK government incentive that lets companies reduce their Corporation Tax bill — or receive a cash payment from HMRC — for money spent on qualifying research and development. It is designed to encourage innovation by making it cheaper for companies to invest in developing new products, processes and services.
From 1 April 2024, the previous SME and RDEC schemes were merged into a single regime known as the merged RDEC scheme. All UK companies — regardless of size — now claim under one set of rules.
AccTek proactively identifies qualifying R&D expenditure and prepares HMRC-compliant claims for startups, SaaS companies, tech businesses and engineering firms across the UK.
For accounting periods beginning on or after 1 April 2024, there are two R&D tax relief schemes:
The merged scheme applies to all companies, regardless of size. It provides a 20% above-the-line expenditure credit on qualifying R&D costs. Because the credit is treated as taxable income, the net benefit depends on your Corporation Tax rate:
For loss-making companies, the credit can be received as a cash payment from HMRC after discharging any tax liabilities.
ERIS targets loss-making SMEs where qualifying R&D expenditure represents at least 30% of total business expenditure. These companies can receive enhanced relief of up to 27% — a significant cash injection for pre-revenue and early-stage businesses investing heavily in innovation.
Profitable company or loss-making below 30% R&D intensity → Merged RDEC (20% credit, ~15–16.2% net).
Loss-making SME with 30%+ spend on R&D → ERIS (up to 27% effective relief).
HMRC follows the DSIT (Department for Science, Innovation and Technology) guidelines. To qualify, your project must seek an advance in science or technology by resolving scientific or technological uncertainty.
| Cost Category | What’s Included | Notes |
|---|---|---|
| Staff costs | Salaries, employer NIC, pension contributions for employees directly involved in R&D | Includes founders writing code or doing technical work |
| Subcontractors | Payments to UK-based subcontractors for R&D work | Overseas subcontractor costs no longer eligible from April 2024 |
| Software | Licences for software used directly in R&D activities | Must be used for qualifying R&D, not general business operations |
| Cloud computing | Hosting and infrastructure costs used in R&D | Added as eligible cost from April 2023 onwards |
| Consumables | Materials, utilities and items consumed in R&D | Must be directly attributable to R&D activities |
| Contributions to research | Payments to universities, charities or scientific research organisations | Independent research only |
From April 2024, costs for overseas subcontractors and externally provided workers (EPWs) are no longer eligible. R&D work must be performed in the UK to qualify.
| Merged RDEC | ERIS | |
|---|---|---|
| Who qualifies | All companies | Loss-making SMEs, 30%+ R&D intensity |
| Credit rate | 20% (above the line) | Enhanced deduction + payable credit |
| Effective net benefit | ~15–16.2% | Up to 27% |
| Cash payment available | Yes, after discharging CT | Yes — directly from HMRC |
A profitable UK limited company spends £100,000 on qualifying R&D in 2026/27:
For a company on the small profits rate (19% CT), the net benefit rises to £16,200.
A pre-revenue startup spends £200,000 on qualifying R&D, with total expenditure of £300,000 (67% R&D intensity):
For early-stage businesses burning cash on product development, this can meaningfully extend runway.
Review your work for projects that sought an advance in science or technology by resolving uncertainty. AccTek does this proactively as part of our ongoing accounting service.
Gather costs directly attributable to R&D — staff time, subcontractors, software, cloud computing and consumables. Apportion costs where staff split time between R&D and other work.
Since April 2023, all R&D claims require a completed Additional Information Form submitted to HMRC before or with the CT600. This must include:
The R&D claim is made through boxes on the CT600. The Additional Information Form must be submitted first or at the same time.
Companies making their first R&D claim (or that haven’t claimed in the previous 3 years) must submit an advance notification to HMRC within 6 months of the end of the accounting period. Miss this deadline and you lose the right to claim for that period.
R&D claims must be submitted within 2 years of the end of the accounting period. For a period ending 31 March 2025, the deadline is 31 March 2027.
Software development is one of the most common sources of qualifying R&D — but also one of the most frequently missed by generalist accountants.
AccTek works with SaaS companies, tech startups and software agencies. We understand how to identify qualifying work from sprint logs, commit histories and technical documentation — and how to present it in a way that satisfies HMRC.
R&D tax relief is a UK government incentive that lets companies reduce their Corporation Tax bill — or receive a cash payment from HMRC — for money spent on qualifying research and development. It is designed to encourage innovation by making it cheaper to invest in developing new products, processes and services.
From 1 April 2024, the separate SME and RDEC schemes were merged into a single regime. All companies now claim under one set of rules, receiving a 20% above-the-line expenditure credit. The net benefit is approximately 15% at the 25% Corporation Tax rate, or 16.2% for companies taxed at the 19% small profits rate.
ERIS (Enhanced R&D Intensive Support) is a scheme for loss-making SMEs where qualifying R&D expenditure represents at least 30% of total business expenditure. Eligible companies can receive enhanced relief of up to 27%.
HMRC follows DSIT guidelines. R&D must seek an advance in science or technology by resolving scientific or technological uncertainty. Routine development, aesthetic design, social science research and commercially motivated work that doesn’t resolve uncertainty do not qualify.
Yes. Software companies developing new products, proprietary algorithms, APIs, data pipelines or solving performance, scalability and security challenges often qualify. Developer salaries, cloud hosting used in development, and UK-based subcontracted development work are typically eligible costs.
Qualifying costs include staff costs (salaries, NIC, pension) for employees directly involved in R&D, consumable materials, software licences, UK-based subcontractor costs, cloud computing costs, and contributions to independent research. Overseas subcontractor and EPW costs are no longer eligible from April 2024.
Under the merged RDEC scheme, the credit rate is 20% of qualifying expenditure. After Corporation Tax, the net benefit is approximately 15% (at 25% CT) or 16.2% (at 19% small profits rate). R&D-intensive loss-making SMEs qualifying for ERIS can receive up to 27% effective relief.
R&D tax relief is claimed through your Corporation Tax return (CT600). You must also submit a completed Additional Information Form to HMRC before or with the return. First-time claimants must submit an advance notification within 6 months of the accounting period end.
A mandatory HMRC submission required for all R&D claims. It requires a named senior officer, a description of qualifying R&D activities, and a breakdown of qualifying costs. It must be submitted before or with the CT600.
Yes. Under the merged RDEC scheme, loss-making companies can receive a cash payment from HMRC. R&D-intensive loss-making SMEs (30%+ of expenditure on R&D) may qualify for ERIS at up to 27% — a significant cash injection for pre-revenue and early-stage businesses.
Claiming routine development, including overseas subcontractor costs (no longer eligible), failing to submit the Additional Information Form, missing the advance notification deadline, and poor documentation of technological uncertainty.
Yes. AccTek proactively identifies qualifying R&D expenditure, prepares HMRC-compliant claims including the Additional Information Form, and submits claims as part of the Corporation Tax return. R&D work is included in our fixed-fee packages — no success-fee commissions.
Let’s find out. AccTek identifies qualifying work and prepares HMRC-compliant claims — as part of your fixed-fee package.
This page is for general information only and does not constitute tax advice. R&D tax relief rules are subject to change. Individual circumstances may vary — contact AccTek for personalised advice. Content by Godwin Pinto, ACA (ICAEW).
