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Research and Development (R&D) tax reliefs

Discover the different types of relief for businesses that work on R&D, find out if you can claim and what to do before you make a claim.

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're uncertain 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 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 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'll need to include partner and linked enterprises when you work out if you're an 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 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 .

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 91�㽶��ɫ��Ƶ (ERIS)

Enhanced R&D intensive 91�㽶��ɫ��Ƶ 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-intensive 91�㽶��ɫ��Ƶ for loss-making SMEs in Northern Ireland

Specific provisions are in place for certain loss-making Northern Ireland-based SMEs engaged in R&D-intensive activities, whose business activities involve no element of trade in goods, and no relevant activities in relation to electricity.

Find out more on .

Before you claim

You must follow these steps before you claim either R&D tax relief or expenditure credit in the , 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 91�㽶��ɫ��Ƶ your claim. Find out .

For further information, see .

R&D disclosure service

HMRC's new R&D Disclosure Facility allows businesses to make a voluntary disclosure for any R&D claims made in error that are out of time to amend on their Company Tax Return. This facility allows companies to repay overpaid credits or additional corporation tax owed. It is for non-deliberate errors only, and offers lower penalties for voluntary disclosures. To use it, businesses must submit detailed calculations, including tax owed, interest, and penalties. HMRC will review disclosures within 30 days and may accept, request more details, or reject them. Professional advice is recommended to navigate the process.

Find out more about the .