R&D tax credits should start with eligibility and evidence, not a target refund. A company needs to identify qualifying work, apply the rules for its accounting period, calculate allowable costs and complete the required claim steps.
This guide explains the scheme and claim-readiness questions for UK companies. For the technical assessment of software work, see R&D tax relief eligibility for SaaS companies.
Government guidance checked on 23 October 2026. Eligibility and filing obligations depend on the company, relevant dates and facts.
Choose the rules for the accounting period
For accounting periods beginning on or after 1 April 2024, the merged Research and Development Expenditure Credit scheme and enhanced R&D intensive support replaced the previous schemes. Earlier periods need their own rules. Check the company’s period start date rather than selecting a scheme simply because the claim is being prepared in 2026.
The HMRC merged scheme and ERIS guidance sets out eligibility. ERIS is for qualifying loss-making R&D-intensive SMEs; the intensity test, connected-company position and any grace-period conditions need assessment. Companies registered in Northern Ireland should check the separate ERIS provisions.
Understand a headline rate before forecasting cash
The merged scheme’s standard credit rate is 20%, and the credit is taxable. It is not a guaranteed 20% cash repayment. For example, £100,000 of qualifying expenditure produces a £20,000 gross expenditure-credit calculation before the remaining tax and payment steps. This is a hypothetical arithmetic example, not a claim estimate.
Use HMRC’s calculation guidance and assess relevant caps and payment conditions. Do not build a funding plan around an expected receipt until the calculation, eligibility and submission position have been reviewed.
Establish the project before allocating costs
The company needs a project meeting the applicable R&D definition. Identify the scientific or technological issue and the people able to explain it. A new commercial product, an unsuccessful sales initiative or a development department is not sufficient evidence on its own.
Keep the technical assessment separate from the cost calculation. The technical team explains the work and uncertainty; the finance team reconciles amounts to records and the relevant claim rules. Neither a persuasive narrative nor a spreadsheet total substitutes for the other.
Prepare a cost schedule that reconciles
- List the projects and relevant periods, with owners and supporting records.
- Reconcile payroll and proposed staff allocations to payroll reports.
- Identify invoices, contracts and payment evidence for other proposed costs.
- Separate qualifying activities from production, support and other routine work.
- Record the reason for each allocation and investigate double counting.
- Reconcile the claim schedule, additional information and tax return.
HMRC’s qualifying costs guidance covers staff, software, cloud and data costs, contractors and exclusions. Contracted-out work and overseas activity require particular checking under the applicable rules. A category appearing in the guidance does not make every invoice in that category eligible.
Check notification early
Some companies must tell HMRC they plan to claim. The requirement depends on claim history, period dates and exceptions. The claim notification guidance defines the relevant period of account and the six-month notification deadline. Do not assume the normal tax-return timetable gives enough time.
Submit additional information in the right order
The additional information form guidance requires submission before or on the day of the Company Tax Return. If both are sent on the same day, submit the additional information first. Check the project descriptions, expenditure and company details against the final return, and retain evidence of submission.
Agree responsibilities before engaging an adviser
Ask who will assess technical eligibility, review expenditure, prepare the calculation, submit forms and answer later questions. Confirm the engagement scope, fees, information responsibilities and review process. Preparation does not guarantee that HMRC will accept a claim or pay a particular amount.
A useful readiness review produces a list of missing evidence, unresolved technical questions, cost-allocation issues and deadline actions. It should explain what still needs investigation before any claim is filed.
Frequently asked questions
Are R&D tax credits the same as a government grant?
No. These are Corporation Tax reliefs claimed through the relevant tax process. Eligibility, expenditure and procedural conditions must be satisfied. A grant, a cash credit and a tax deduction should not be treated as interchangeable.
Which R&D scheme applies to current accounting periods?
For accounting periods beginning on or after 1 April 2024, consider the merged RDEC scheme or enhanced R&D intensive support, subject to eligibility. Earlier accounting periods use the rules applicable to those periods. Northern Ireland ERIS rules require separate consideration.
Does spending money on development prove eligibility?
No. The project must meet the relevant definition of R&D, and the costs and claim process must also qualify. Commercial novelty, a new product or a large development budget do not establish eligibility on their own.
Is the merged scheme’s 20% credit a guaranteed cash repayment?
No. The headline rate is a taxable expenditure credit, not a promised cash benefit. The final result depends on qualifying costs, tax calculations, payment rules, caps and the company’s circumstances.
Must every company submit a claim notification?
No. The requirement depends on the accounting period, claim history and relevant exceptions. Check HMRC’s notification guidance early. Where required, the notification period ends six months after the period of account, which may differ from a single Corporation Tax accounting period.
When is the additional information form submitted?
HMRC requires it before or on the same day as the Company Tax Return containing the claim. If filing on the same day, submit the additional information form first. Retain the submission record and reconcile it with the return.
Can Consult EFC help prepare the financial evidence?
We can discuss a scoped review of records, cost schedules and claim-readiness information. The engagement must specify technical assessment, tax calculations, filings and any specialist adviser responsibilities. Eligibility or HMRC acceptance is not guaranteed.
Discuss your claim-readiness records
Tell us the period dates, type of development, claim history and records available. We will confirm whether the requested work fits our scope and identify any specialist support required. Contact Consult EFC.
About the author: Kishen Patel ACA, founder of Consult EFC. View the ICAEW member profile.
Not sure where your business stands right now?
Book a free 30-minute call with Kish. Bring your numbers, your questions, or just your situation. You will leave with a clearer picture than you arrived with.
Book a Free Strategy Call
Over 12 years across Big Four audit, Investment Banking, and corporate advisory. Kish works with SaaS founders, tech companies, and ambitious UK SMEs from £1M to £50M in revenue on fundraising, valuations, exit planning, and financial strategy. ICAEW regulated. Big Four trained. Based in London.