How to claim R&D tax credits, step by step

Claiming R&D tax credits is a sequence, and two steps in it have to reach HMRC before your Company Tax Return does. If this is your first claim in three years, you have to tell HMRC you intend to claim within six months of your year end, or the claim is invalid however much you spent. After that you work out what the period is worth, write up each project, send the additional information form, and claim on the return itself. Every figure here is the position on 14 October 2026.

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What R&D tax credits are

R&D tax credits reward businesses for taking on the risks of innovation. They are particularly helpful for smaller companies solving complex technical or scientific problems, and you can claim whether or not the project worked. What matters is the effort and the uncertainty involved.

R&D relief is one of several kinds of business tax relief a limited company can claim, and it is the one that has changed most since 2023. Depending on your position, the credit either reduces your corporation tax bill or is paid to you.

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Which rules apply depends on when your accounting period began

The rules were rewritten in three stages, and which stage applies to you depends on when your accounting period started rather than on today's date. A company with a June year end was still on the old schemes well into 2025.

• 8 August 2023: an additional information form became mandatory for every claim.
• Accounting periods beginning on or after 1 April 2023: first-time claimants, and anyone who has not claimed for three years, have to tell HMRC in advance.
• Accounting periods beginning on or after 1 April 2024: the merged scheme and enhanced R&D intensive support replaced the old expenditure credit and small business schemes, and new restrictions landed on R&D carried out abroad and on who claims contracted-out work.

The first two changes decide whether a claim is valid at all. The third decides what it is worth.

You can still claim for a period that has closed. The deadline is 24 months from the last day of a period of account of 18 months or less, or 42 months from the first day of a longer one. The Company Tax Return deadline of 12 months after your accounting period ends is a different date, and meeting it does not help if the notification window has already shut.

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Step 1: check that the project counts as R&D

HMRC's test is about the project, not about your business or your sector. The project has to do two things:

• Advance science or technology, by aiming at something that is not readily available in the field rather than something that is simply new to you.
• Resolve uncertainty, by tackling a problem a competent professional in the field could not readily solve.

This is not limited to 'groundbreaking' discoveries. Improving an existing manufacturing process to make it more efficient can qualify if it meant overcoming technical problems. Other common examples are developing software to automate a task or process data in a new way, building prototypes for a new product, and experimenting with materials to improve durability or reduce waste.

A project that failed still counts, and so does one that another company has already solved, as long as its solution is not publicly known or available. Two boundaries are worth knowing early: mathematical advances have counted as science for these purposes since 1 April 2023, and the arts, humanities, and social sciences including economics do not qualify at all. Check if you can claim R&D tax relief on GOV.UK sets out the detail.

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Step 2: tell HMRC you are going to claim

If this is your first R&D claim, you have to notify HMRC before you claim it, and the window closes early. The claim notification period runs from the first day of your period of account to six months after the end of it. Miss it and, in HMRC's words, 'your R&D tax relief claim will be invalid'. There is no way back for that period.

You need a notification for accounting periods beginning on or after 1 April 2023 if you are claiming for the first time, or if your last claim was made more than three years before the last date of your notification period. Two exceptions pull repeat claimants back in: you still have to notify if HMRC removed a previous claim from your Company Tax Return, or if your only recent claim was for a period beginning before 1 April 2023 and was made by an amendment HMRC received on or after 1 April 2023. Tell HMRC you want to claim R&D tax relief gives both in full.

Have this ready before you open the form:

• Your company's Unique Taxpayer Reference.
• The dates of your period of account, and of the accounting period you are claiming for.
• A summary of the planned work.
• Contact details for a senior person inside the company who is responsible for the claim, and for every agent involved in it.

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Step 3: work out which scheme applies, and what it is worth

For accounting periods beginning on or after 1 April 2024 there are two schemes. The merged scheme is the default and open to companies of any size: an expenditure credit worth 20% of your qualifying spend, which HMRC then taxes as trading income.

Enhanced R&D intensive support is only for loss-making small and medium-sized companies spending at least 30% of their total expenditure on R&D, and it works differently: an extra 86% deduction, making 186% in total, then a payable credit worth 14.5% of the amount you surrender. You can choose the merged scheme even where you qualify for the intensive one, but not both for the same costs.

Either way the credit is capped at £20,000 plus 300% of your relevant PAYE and National Insurance liabilities for the period, unless you are exempt, and under the merged scheme anything above the cap carries forward. There is no minimum spend, and the forms are the same whatever the amount, so a very small claim can cost more in time and fees than it returns.

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What £100,000 of qualifying spend is worth

Take £100,000 of qualifying R&D in an accounting period beginning after 1 April 2024. Under the merged scheme, 20% of that is a £20,000 expenditure credit, taxable as trading income. You rarely receive the whole of it: HMRC sets the credit against your corporation tax for the period first, then against other liabilities in a fixed order, and pays out the remainder.

Under the intensive scheme, the extra 86% deduction on £100,000 is £86,000, giving £186,000 of enhanced expenditure. The payable credit is 14.5% of whichever is lower, the £186,000 or your trading loss after the extra deduction, so at most £26,970. That is where the 'up to 27%' quoted elsewhere comes from: 26.97% is the intensive scheme's ceiling for a loss-making company, not the rate a typical claimant gets.

You will also see single 'net benefit' percentages quoted for each scheme. HMRC publishes none. Work out your R&D tax relief gives the rates and the order of the calculation, and what you bank after that depends on your corporation tax position, your losses, and the cap, which is why the figures on adviser websites disagree with each other.

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Step 4: add up the costs you can claim

You claim the share of each cost that relates to the R&D itself, between the point work starts to resolve the uncertainty and the point it is resolved or abandoned, and the cost has to have been paid before you claim it. How much of each cost you can claim depends on its type:

You cannot claim the production and distribution of goods and services, capital expenditure, land, patents and trademarks, or rent, rates, and leasing. Grants are much less of an obstacle than they were: for accounting periods beginning on or after 1 April 2024 there is no restriction on claiming subsidised costs under either scheme, although the same pound of spend still cannot be claimed twice.

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Work done outside the UK

For accounting periods beginning on or after 1 April 2024 you cannot claim contracted costs where the R&D activity takes place abroad, and the same applies to agency staff working abroad. The exceptions are narrow, and companies with a registered office in Northern Ireland claiming under the intensive scheme are outside the restriction. Check what R&D costs you can claim sets out both.

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Who claims when the work was contracted out

Only the company that decided to carry out the R&D and planned it can claim. So if you did the work for a customer, the claim is yours only if you decided on the R&D and planned it, and your customer neither initiated it nor knew it was needed to fulfil the contract. Read your contracts before you assume it is.

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Step 5: write up each project and send the additional information form

Successful claims rely on robust documentation, and since 8 August 2023 that documentation has had a form of its own. Prepare a technical report for each project you describe: HMRC wants the main field of science or technology, the baseline level you planned to advance from, the advance you were after, the uncertainties you hit, and what you did to try to overcome them. Write about the technical problem rather than the commercial one, and track the costs alongside it, linking each one to a specific R&D activity.

How many projects you describe depends on how many you are claiming for:

• One to three projects: describe them all.
• 4 to 10 projects: describe at least three, together covering at least half the qualifying expenditure.
• More than 10: the same rule, and if meeting it would take more than 10 projects, describe the 10 largest by qualifying expenditure.

Then send the additional information form, one per accounting period. It has to reach HMRC before, or on the same day as, your Company Tax Return, and where both go on the same day the form has to go first. If the return arrives first, HMRC rejects the R&D claim and writes to confirm it is removing it from your return. It is the most avoidable way there is to lose a valid claim.

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Step 6: claim on your Company Tax Return

The claim itself goes on the return. Put an 'X' in box 656 to confirm you submitted the claim notification form and in box 657 for the additional information form, complete supplementary form CT600L, and include your bank details if a payment is due. The date you file your Company Tax Return sets the timing for everything that follows.

Then keep the evidence behind it: the time records for the staff you apportioned, invoices for contractors and agency staff split by where the work was done, and the dated notes from the people who hit the technical problems.

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If you want HMRC's view before you claim

Advance assurance is voluntary, and asking for it is not the same as making a claim. HMRC has run two services since 18 May 2026, and you cannot use both for the same period or project.

• Full claim advance assurance is for small and medium-sized companies claiming R&D relief for the first time. It covers the whole claim, and the agreement runs for your first three accounting periods only.
• Targeted advance assurance is a pilot running until May 2027. It gives you HMRC's view on one complex or high-risk area, and you can make up to two applications, each covering one project and one area.

Neither service means a later claim escapes scrutiny. HMRC's advance assurance guidance compares them.

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Why HMRC is looking harder at R&D claims

HMRC puts error and fraud across the R&D reliefs at 6.4% of R&D relief expenditure, or £493 million, for 2023 to 2024, split unevenly between 11.1% in the old small business scheme and 3.2% in the expenditure credit scheme. Those are its own estimates, from its annual report and accounts 2025 to 2026, and they are why the forms exist.

Claimants have reacted. HMRC's statistics on R&D tax credits, published on 29 September 2026, show first-time applicants down 43% in 2023 to 2024, the fifth consecutive annual fall, with 3,405 first-time applicants in the small business scheme.

The practical consequence is that the write-up now carries the claim. A list of costs with a thin technical narrative attached is what the additional information form is designed to catch, so give the technical detail the same care as the numbers.

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Choosing an accountant or an R&D specialist

For anything beyond a single straightforward project, an accountant or an R&D specialist is usually worth the fee, and the forms assume you have had help. The additional information form asks for the details of every agent involved in the claim, including anyone who advised on it, analysed the costs, or prepared the technical write-up. It also asks for a named senior person inside your company, usually a director, who is responsible for the claim. That name sits on the claim whoever prepared it.

R&D advice is an unregulated market and it has had a poor-practice problem. HMRC runs a route for accountancy professionals to report another agent for giving misleading information, having poor technical knowledge, or dishonest behaviour, and says it 'helps us reduce error and fraud'. Its guidance on reporting poor R&D service standards explains how.

Four questions are worth asking before you engage anyone:

• Who writes the technical narrative, and what technical background do they have?
• Will they handle an HMRC enquiry, and at what cost?
• How does the fee work if HMRC reduces the claim?
• Will they put their own name on the form?

An adviser who will not answer the last one is telling you something. Your own accountant may be the right choice for a small, clear-cut claim, and a specialist earns the fee on a complex or a first-time one. Either way, R&D relief turns on details specific to your company and its projects, so check anything material with an accountant or a tax adviser before you file.

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What happens while you wait to be paid

HMRC publishes no processing time for R&D claims. R&D is not covered by its tool for checking when to expect a reply, and its service levels dashboard carries no R&D line, so the timescales quoted around the web are estimates made by advisers rather than commitments made by HMRC. A compliance check extends the wait again.

Two dates make that wait awkward. You have to pay your corporation tax nine months and one day after your accounting period ends, where your taxable profits are up to £1.5 million, and the return that carries your R&D claim is not due for 12 months. File late in that window and you will have settled the corporation tax in full before anyone at HMRC has looked at the claim meant to reduce it.

Until the claim is settled, both the amount and the timing are uncertain, so treat it as something that may reduce a future tax bill rather than as money you already have. Covering a bill you know is due is a different question from borrowing against a claim you are still waiting on.

Most R&D spend is payroll, and payroll does not wait for HMRC. If a corporation tax bill is due before your cash comes in, an iwoca Flexi-Loan, a business loan with flexible repayment options, lets you pay it on time and repay early for free once your sales catch up. That gap bites hardest on companies whose R&D spend is mostly salaries, that are claiming for the first time, and that have little in reserve.