Ready to make your R&D claim stress-free?
Knowing how to claim R&D tax credit correctly can unlock thousands of pounds in Corporation Tax savings for your business. Getting professional support with your R&D tax credits ensures your claim is accurate, compliant, and backed by the right documentation.
R&D tax relief rewards UK companies that invest in innovation—whether that’s developing new software, refining production techniques, or solving complex technical challenges. But because HMRC now expects detailed evidence and structured submissions, it’s vital to follow each step carefully.
This guide simplifies the process from start to finish.
In this guide, you’ll learn:
- How to claim R&D tax credit through your Company Tax Return
- Which documents and details HMRC expects in your submission
- The final checklist to review before you file
Sleek makes claiming R&D Tax Credits a breeze
What is an R&D tax credit and how does it work?
R&D tax credits are a government incentive that encourages innovation by reducing your company’s Corporation Tax bill or offering a cash repayment. In simple terms, if your business spends money developing new products, processes or services, you can claim R&D tax credit to recover a portion of those costs.
The amount you can claim depends on your company’s size and profitability. Since April 2024, most companies fall under the merged R&D scheme, while loss-making, innovation-heavy SMEs may qualify for the Enhanced R&D Intensive Support (ERIS) regime.
Both schemes let you claim for eligible costs such as staff, subcontractors, software and consumables used in qualifying projects.
How R&D tax relief works
Company type | Scheme | Effective rate of benefit |
Profit-making SME | Merged R&D scheme | Up to 16.2% of qualifying costs |
Loss-making SME | ERIS (Enhanced R&D Intensive Support) | Up to 27% cash benefit |
Large company | Merged R&D scheme | Around 15–16% after tax |
Your claim is submitted through your Company Tax Return. If your company made a profit, the R&D credit reduces the Corporation Tax you owe. If it made a loss, you can usually surrender that loss for a cash payment from HMRC.
Understanding this link between your R&D activity and Corporation Tax helps ensure your claim is accurate. You can learn more about related obligations in our guides on paying Corporation Tax and current Corporation Tax rates.
Check if your business qualifies for R&D tax relief
Before you start gathering figures, make sure your company and its projects meet HMRC’s definition of research and development.
To claim R&D tax credit, you must show that your work aimed to make an advance in science or technology and involved genuine uncertainty; something a competent professional couldn’t easily solve.
Basic eligibility
To qualify, your company must:
- Be a UK limited company subject to Corporation Tax
- Have carried out qualifying R&D activities during the claim period
- Have spent money directly on those projects
This means sole traders, partnerships and charities can’t claim, as R&D tax relief applies only to companies registered for Corporation Tax. If you’re setting up a new business, see our guide on limited company setup to understand the process.
What counts as R&D
R&D goes beyond lab work or software development. It includes attempts to create or improve products, systems or processes where the outcome wasn’t certain. For example, developing a more efficient data algorithm or designing a new manufacturing method can both qualify.
However, projects in areas such as economics, social sciences or pure design don’t count, as they don’t address scientific or technological uncertainty.
The trading requirement
HMRC also looks at whether your company was actively trading when the R&D took place.
If you meet these conditions, you can move forward with your claim—gathering your costs, completing your reports and preparing your submission.
How to claim R&D tax credit step by step
Once you’ve confirmed eligibility, it’s time to prepare your claim. Each stage ensures your submission meets HMRC’s requirements and that you receive the full benefit you’re entitled to.
Step 1: Gather your evidence and costs
Start by collecting detailed records of your qualifying R&D projects. You can claim for:
- Staff costs, including salaries, employer’s NIC and pension contributions
- Subcontractor and freelancer fees
- Software, cloud computing and data licences
- Consumables such as heat, light and power used during the R&D process
Accurate cost allocation is vital. Every figure in your claim should link to your accounting records. To make sure you’re including eligible items only, read our guide on limited company expenses.
Step 2: Check if you must notify HMRC
If you’re claiming for the first time, or it’s been over three years since your last claim, you may need to notify HMRC in advance. The claim notification form must be submitted within six months of the end of your accounting period. It outlines basic company details and project summaries.
Make sure to learn how to register for Corporation Tax to keep everything up-to-date and compliant.
Step 3: Complete the additional information form (AIF)
This form is mandatory for all claims. It includes key project descriptions, technical challenges and cost breakdowns. The AIF must be submitted before your Company Tax Return.
Keep supporting evidence organised, including emails, design notes and test results that show how you attempted to resolve technological uncertainty.
Keep all documents in a single folder linked to each project code and period. It will save time if HMRC asks questions later.
Step 4: Prepare your technical and costing reports
Write a short narrative explaining how your work advanced science or technology. If you have three or fewer projects, include them all. If you have four or more, your report must cover at least three that represent 50% or more of your qualifying spend.
Step 5: Submit with your Company Tax Return
You’ll file your claim as part of your Company Tax Return (CT600). Attach the AIF and relevant reports when submitting through your online filing software.
If your claim creates a payable credit, HMRC will usually issue a refund directly to your company bank account.
Final submission checklist for claiming R&D tax credit
Before you hit “submit”, make sure every part of your R&D claim is complete and consistent. A missing form or mismatched figure can delay your payment or trigger unnecessary questions from HMRC.
Your 10-point pre-submission check
- Eligibility confirmed – Your company is a UK limited company, and your activities meet HMRC’s definition of R&D.
- Correct scheme selected – You’ve confirmed whether your claim falls under the merged R&D scheme or the Enhanced R&D Intensive Support (ERIS) regime.
- Notification form submitted (if required) – You’ve filed the claim notification within six months of your year end.
- Additional information form completed – All mandatory project details, cost summaries and contact information are filled in.
- Technical report ready – Each project description explains the advance, uncertainty and outcome clearly.
- Cost schedules reconciled – Totals match your accounting records and include only qualifying R&D costs.
- PAYE and NIC figures verified – Check that staff costs align with payroll data.
- Subcontractor and overseas costs reviewed – Only eligible R&D expenditure is included under the latest rules.
- CT600 and computations attached – Your claim value is included in your Company Tax Return, with the correct boxes completed.
- Claim evidence stored – Copies of reports, invoices and correspondence are saved for future reference.
Set a short "tax day" reminder each quarter to review R&D activity and update your project notes. This makes next year's claim faster and reduces the risk of errors.
Avoid common mistakes when you claim R&D tax credit
Even strong claims can fail if they miss key details or mix eligible and ineligible costs. HMRC’s compliance checks have become more thorough, so accuracy and documentation matter as much as innovation itself.
Common errors to watch for
- Incomplete project descriptions – Many claims lack a clear explanation of what technical uncertainty was faced or how it was overcome.
- Unverified costs – Payroll and subcontractor costs that don’t reconcile with accounting records are red flags.
- Missing additional information form – Since 2023, the AIF is mandatory for every claim. Omitting it means HMRC can reject your submission outright.
- Overclaiming for routine work – Everyday process improvements, bug fixes or cosmetic updates rarely meet the definition of R&D.
- Late submission – Claims must be made within two years of the end of the accounting period, after which they expire.
You can minimize these risks by keeping your records in real time and reviewing them before filing. Avoid rushing at year-end—accuracy always outweighs speed.
To understand where the line sits between legitimate tax relief and riskier territory, see our guide on tax avoidance vs tax evasion vs tax planning. You can also learn how to stay compliant with penalties and reporting deadlines in our article on HMRC and Companies House fines.
When to expect your R&D tax credit payment and what happens next
Once your R&D claim has been filed with your Company Tax Return, HMRC will review the information in your Additional Information Form and supporting reports. Processing times vary depending on their workload and the complexity of your claim.
Typical timeline
- Acknowledgement: You’ll usually receive confirmation of receipt within a few days of submitting your return.
- Processing: Most claims are reviewed within 40 working days. If HMRC needs clarification, they’ll contact your company or accountant.
- Payment: If you’re due a cash credit, the amount is transferred directly to your company bank account once approved.
If you claimed a reduction in Corporation Tax, the adjustment appears in your tax computation and reduces what you owe for that accounting period.
If HMRC opens an enquiry
Occasionally, HMRC may ask for more detail on your project or expenditure. This doesn’t always mean your claim is wrong; it may just need further clarification.
Respond promptly and refer to your technical report, cost breakdown and any emails or notes showing the uncertainty your work aimed to solve.
To avoid enquiry delays, double-check your submission against the Corporation Tax payment guide and keep records of every communication with HMRC.
Easily claim R&D tax credits with Sleek
Once you understand how to claim R&D tax credit and what HMRC expects, the process becomes far simpler. The key is preparation, keeping records throughout the year and reviewing your submission before you file. With the right partner, you can focus on innovation while staying fully compliant.
At Sleek, our accounting specialists help you prepare and review your R&D tax credit claim so every eligible cost is captured and correctly reported. From checking your Additional Information Form to reconciling costs in your Company Tax Return, we make sure your submission meets HMRC’s standards.
Let Sleek’s experts handle your R&D tax credit submission so you can focus on growing your business.
Want to make your R&D tax credit claim quickly & confidently? Speak to a Sleek accountant today and get expert support with your submission, from start to finish.
FAQs on how to claim R&D tax credit
Do I need to notify HMRC before I claim?
Yes, if it’s your first claim or your last claim was over three years ago. The notification must be submitted within six months of your accounting period end.
Who can claim R&D tax credit in the UK?
Any UK limited company that is subject to Corporation Tax can claim if it has carried out qualifying research and development. This includes both SMEs and large companies under the merged R&D scheme. You can check eligibility by reviewing your limited company setup and confirming you pay Corporation Tax.
What counts as qualifying R&D work?
Qualifying projects aim to make an advance in science or technology and must involve uncertainty that a competent professional cannot easily resolve. Examples include improving production processes, developing new algorithms or creating prototypes.
What costs can I include in an R&D tax credit claim?
You can include:
- Staff salaries, NIC and pension contributions
- Subcontractor and freelancer fees
- Software, cloud and data costs
- Consumables such as materials, heat and light
You’ll find more details in our guide to limited company expenses.
What is the deadline to claim R&D tax credit?
You have two years from the end of your accounting period to submit your R&D tax credit claim. If your year ended on 31 March 2024, the deadline to claim is 31 March 2026. Late claims are automatically rejected.
What is the Additional Information Form (AIF)?
The AIF is a mandatory form submitted before your Company Tax Return. It summarises your projects, technical challenges and qualifying costs. Without it, HMRC will not process your claim.
Can I claim R&D tax credit for subcontracted work or overseas projects?
You can, but there are limits. Under the merged scheme, subcontractor costs are only claimable if your company directs and benefits from the R&D. Overseas costs must meet specific exceptions, so review them carefully before including them.
What happens if I make an error in my R&D tax credit claim?
If you spot an error after submission, you can amend your Company Tax Return within the two-year window. If HMRC has already reviewed it, contact them promptly or consider professional help to submit a correction.
How long does HMRC take to pay R&D tax credits?
Most claims are processed within 40 working days, but more complex or high-value claims can take longer. Ensure your AIF and technical reports are complete to avoid delays.
How will HMRC pay my R&D tax credit?
If you claim a payable credit, HMRC will transfer the amount directly into your company bank account. If you used the relief to offset Corporation Tax, it reduces your tax bill instead.
Can I claim R&D tax credit every year?
Yes. As long as your company continues to carry out qualifying R&D work, you can claim each accounting period. Keeping project records up to date throughout the year makes repeat claims easier.
What happens if HMRC opens an enquiry?
HMRC may request more evidence about your project or costs. This doesn’t always mean your claim is wrong. Provide your technical narrative, cost summaries and project documentation promptly.
What records should I keep for R&D tax relief?
Maintain payroll records, invoices, contracts, design notes and correspondence showing how your work tackled uncertainty. Keeping these organised will protect your claim if HMRC requests proof later.
Can loss-making companies claim R&D tax credit?
Yes. Loss-making companies can surrender their losses for a cash credit under the merged scheme or claim enhanced relief under the ERIS regime if they meet the R&D intensity threshold.
What is the R&D intensity threshold for ERIS?
To qualify for ERIS, your company must spend at least 30% of its total expenditure on R&D in accounting periods starting on or after April 2024 (previously 40%).
Can I claim R&D tax credit if I receive a grant?
Possibly. The rules differ based on the type of grant and whether it is notified state aid. Review your funding agreements carefully before including those costs in your claim.
Do I need an accountant to claim R&D tax credit?
You can submit a claim yourself, but professional review helps ensure your reports meet HMRC’s requirements and that no eligible costs are missed. For help, visit our page on R&D tax credits.
Disclaimer: The preceding information is not legal advice. This content is aimed to provide general guidance. For more formal or legal advice, contact Sleek directly.
