Research and Development (R&D) tax reliefs

Guidance

Research and Development (R&D) tax reliefs help UK businesses working on innovative projects in science and technology.

If your project qualifies as R&D for tax purposes, you can claim Corporation Tax relief.

Projects that qualify as R&D

To qualify for R&D tax relief, the work must be part of a specific project to make an advance in science or technology. You cannot claim if the advance is in:

the arts
humanities
social sciences, including economics

The project must relate to your company's trade, either an existing one, or one that you intend to start up based on the results of the R&D.

To claim, you need to explain how a project:

looked for an advance in the field
had to overcome the scientific or technological uncertainty
tried to overcome the scientific or technological uncertainty
could not be easily worked out by a professional in the field

Your project may research or develop a new process, product or service or improve on an existing one.

If you are not sure if your project work involves R&D for tax purposes, you can use this HM Revenue & Customs tool to check.

Alternatively, more guidance is available to help you understand:

Types of R&D tax relief - accounting periods beginning before 1 April 2024

There are two different types of R&D tax relief, depending on the size of your company and if the project has been subcontracted to you or is subsidised, or both.

Small and medium-sized enterprise (SME) R&D tax relief

You can claim SME R&D tax relief if you're an SME with both of the following:

less than 500 staff
a turnover of under 100 million euros or a balance sheet total under 86 million euros

You must include the staff, turnover and balance sheets of any linked or partner companies in your total when you work out if you can claim R&D tax relief for SMEs.

For some periods beginning on or after 1 April 2023, additional support was available for R&D‑intensive SMEs under the SME scheme. Check current HMRC guidance for the applicable R&D intensity threshold and rates for your accounting period.

R&D expenditure credit

Large companies can claim expenditure credit for working on R&D projects.

SMEs who have been subcontracted to do R&D work by a large company or have subsidised expenditure can also claim expenditure credit.

For accounting periods beginning on or after 1 April 2023, you may need to tell HM Revenue & Customs (HMRC) if you plan to claim R&D tax relief or expenditure credit.

Types of R&D tax relief - accounting periods beginning on or after 1 April 2024

For periods beginning on or after 1 April 2024, there is one merged scheme for all companies. There is also an additional scheme with a more generous basis of calculation for only loss-making R&D intensive SMEs.

The expenditure rules are the same for both forms of relief, but the calculation is different.

Where work is done under contract, the party that initiated the R&D project is generally the party that can claim.

Merged scheme for R&D expenditure credit (RDEC)

Any size of company doing qualifying R&D can claim under the merged scheme.

Enhanced R&D intensive support (ERIS)

Enhanced R&D intensive support is calculated in the same way as the SME scheme before 1 April 2024. You can claim ERIS if:

you're a SME with:
- less than 500 staff
- a turnover of under 100 million euros or a balance sheet total under 86 million euros
you make a trading loss for tax purposes before relief is calculated
you meet the R&D intensity condition, with an R&D intensity of at least 30%

The same expenditure rules apply as for the merged scheme.

For more information, see R&D tax relief: the merged scheme and enhanced R&D intensive support.

R&D-intensive support for loss-making SMEs in Northern Ireland

There are specific provisions for loss‑making, R&D‑intensive SMEs with a registered office in Northern Ireland. These affect how ERIS and overseas expenditure limits apply. SMEs whose business activities involve no trade in goods and no relevant electricity‑market activities can choose to opt out of the Northern Ireland provisions.

Find out more on R&D tax relief: Enhanced R&D intensive support for loss-making SMEs based in Northern Ireland.

Before you claim

You must follow these steps before you claim either R&D tax relief or expenditure credit in the Company Tax Return, or your claim may not be valid.

For accounting periods beginning on or after 1 April 2023, check if you need to submit a claim notification form to notify HMRC in advance of your claim. Find out what you need to provide when you tell HMRC that you're planning to claim R&D tax relief.
From 8 August 2023, you must submit an additional information form to support your claim. Find out what information you need to submit, when and how to submit it.

For further information, see HMRC's collection of guides on R&D tax relief.

R&D disclosure service

HMRC’s R&D Disclosure Facility lets businesses correct mistakes in R&D tax claims that are too late to amend on a Company Tax Return. It is for non-deliberate errors only. Businesses can use it to repay overclaimed tax credits or any extra Corporation Tax owed. To use this facility, you need to include calculations showing the tax, interest, and any penalties. HMRC will review disclosures and may accept them, ask for more information, or reject them. Getting professional advice is recommended.

Find out more about the HMRC's R&D disclosure service.