Research and Development (R&D) tax relief supports companies that work on innovative projects in science and technology.
You may be able to claim Corporation Tax relief if your project meets the definition of R&D for tax purposes.
The following gives you a brief explanation of the definition, and the different types of reliefs you may be able to claim.
Projects that count asR&D
The work that qualifies for R&D tax relief 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.
Project details
Advances in the field
Your project must aim to create an advance in the overall field, not just for your business.
The process, product or service can still be an advance if it’s been developed by another company but is not publicly known or available.
Show there was a scientific or technological uncertainty
A scientific or technological uncertainty exists when your company or an expert on the subject cannot say if something is technologically possible, or how it can be done, even after referring to all the available evidence.
This means that your company or experts in the field cannot already know about the advance or the way to solve it.
Explain how you tried to overcome the scientific or technological uncertainty
To tell HMRC how you tried to overcome the scientific or technological uncertainty, you should show that the R&D needed research, testing and analysis to develop it.
You need to be able to explain the work you did to overcome the uncertainty. This can be a simple description of the successes and failures you had during the project.
Show that a professional in the field could not work this out
You should explain why a professional could not easily work out your advance. You can do this by showing that other attempts to find a solution had failed.
You can also show that the people working on your project are professionals in that field and get them to explain the scientific or technological uncertainties involved.
If you’re not sure whether your project qualifies for R&D tax relief, check:
Types of R&D tax relief — accounting periods beginning before 1 April 2024
There are 2 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 if you’re a 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’ll need to include partner and linked enterprises when you work out if you’re a SME.
For qualifying expenditure incurred on or after 1 April 2023, you can claim the higher 14.5% tax credit rate if you meet the intensity condition with an R&D intensity of at least 40%.
R&D expenditure credit
Large companies can claim expenditure credit for working on R&D projects.
It can also be claimed by SMEs who have been subcontracted to do R&D work by a large company or have subsidised expenditure.
Types of R&D tax relief — accounting periods beginning on or after 1 April 2024
There’s one merged scheme for all companies.
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. Where work is done under contract, the party that initiated the R&D project is generally the party that can claim.
For more information, read .
Merged scheme for R&D expenditure credit
Any size of company doing qualifying R&D can claim under the merged scheme.
Enhanced R&D intensive support
Enhanced R&D intensive support is calculated in the same way as the SME scheme before 1 April 2024.
You can claim enhanced R&D intensive support 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.
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 .
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.
Published 1 January 2007
Last updated 8 May 2024 +show all updates
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Added translation
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Information on types of Research and Development (R&D) tax reliefs for accounting periods beginning before 1 April 2024, and on or after 1 April 2024 have been updated.
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Added a link to what work qualifies as R&D for tax purposes.
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The information about when you must submit an additional information form has been updated from '1 August 2023' to '8 August 2023', and the text regarding voluntary submission of the additional information form before the mandatory date has been removed in step 2 of section 'Before you claim'.
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Updates have been made throughout this guidance to clarify what R&D tax reliefs are and the projects that count as R&D. A new section has been added to tell you what you need to do before you claim R&D tax relief for accounting periods beginning on or after 1 April 2023 and for claims from 1 August 2023.
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Updated to show the Research and Development Expenditure Credit will increase to 13% of qualifying research and development expenditure from 1 April 2020.
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The guidance has been updated to show new rates for 2018.
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The guidance has been updated to show who can make an amended claim to tax relief for reimbursed expense, and how to make a claim.
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The link free pre-recorded webinar in Further information section has been updated.
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A new pre-recorded webinar for R&D Advance Assurance has been added to this page.
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A new pre-recorded webinar giving an overview on Advance Assurance has been added to this page.
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This guide has been shortened to give overall guidance to R&D tax relief. Two new guides have been published in addition to give R&D more specific R&D guidance. One is for large company guidance and the other for small to medium enterprises.
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This guidance has been updated to include information about R&D Advance Assurance.
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First published.
