A government tax relief incentive designed to support businesses overcoming technological or scientific uncertainties.
R&D (Research and Development) tax relief is a UK government incentive designed to support innovation. It allows eligible UK companies to reduce their Corporation Tax bill, or in some cases, receive a cash credit, in recognition of qualifying R&D activity.
The relief is intended to help offset the costs of innovation, including staff time, subcontractors, software, consumables and utilities, where those costs relate directly to R&D.
As of 1 April 2024, most UK companies now claim R&D tax relief through RDEC, replacing the previous SME and RDEC routes.
Relief is typically worth around 15% of qualifying R&D expenditure for profit-making companies (after tax), 16.2% as a cash credit for loss-makers or up to 27% for R&D intensive loss makers.
Loss-making SMEs that spend at least 30% of their total costs on qualifying R&D may be eligible for Enhanced R&D Intensive Support. ERIS is not available to large companies.
This can increase the cash credit rate for these loss-making SMEs to around 27%.
Even if your R&D is subsidised, for example through a grant, you can still claim under RDEC. The old restrictions on SME claims for subsidised projects no longer apply.
Summary by accounting period start date
Claims depended on company size and funding structure. SMEs could access enhanced relief, while larger companies used RDEC. Subsidised R&D reduced SME benefits.
Single unified scheme with 20% above-the-line credit. Net benefit ~15% for profit-makers, up to 16.2% cash credit for loss-makers.
Loss-making companies spending 30%+ on R&D qualify for higher cash credits, worth up to ~27% of qualifying expenditure.
R&D tax relief applies across a wide range of industries, some more commonly than others.
Developing new products, materials, or improving production processes
Building new digital platforms, systems, or solving technical challenges in code
Improving energy efficiency, reducing emissions, or developing clean technologies
Innovating in building design, materials, or construction techniques
Conducting medical research, developing treatments, or improving formulations
Enhancing shelf life, food safety, or production efficiency through technical changes
HMRC defines R&D as activities that aim to achieve an advance in science or technology through the resolution of uncertainty.
Developing or improving software platforms or systems
Creating new materials or products
Enhancing manufacturing processes for efficiency or sustainability
Adapting existing technologies for new applications
Overcoming technical challenges where no obvious solution exists
Even projects that don't succeed can still qualify, it's the attempt to solve a problem that matters.
A comprehensive guide explaining how RDEC affects your Corporation Tax liability, with practical examples and advancement strategies.
Download our comprehensive R&D Tax Relief Guide to understand eligibility, qualifying activities, and the claims process in detail.
R&D tax relief can deliver substantial financial benefit, but it's a complex area that demands accuracy, clarity, and sound judgement.
Our depth of knowledge means we spot opportunities others often overlook, ensuring your claim is as complete and accurate as it should be.
We prepare detailed, carefully documented claims with a strong emphasis on compliance, giving you confidence and peace of mind.
We're with you beyond submission deadlines, offering ongoing guidance and strategic input as your business evolves.
Partnership Beyond Compliance
We work in genuine partnership with you, not just to identify relief today, but to strengthen your processes and get the most from opportunities for the future.
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I've had an excellent experience working with Fabien. He has been taking care of my R&D project, and throughout the entire process he has been knowledgeable, professional, and incredibly responsive.
Call or message us today. No commitment, no pressure and no obligations.
Just an honest, expert conversation regarding your eligibility.
Let's explore how Lexmore can make a difference for you and your business.
From initial assessment to ongoing aftercare, we guide you through every step of the R&D tax relief process with comprehensive support
30 - 60 Min Meeting
Free consultation to understand your R&D activities and determine eligibility
1 - 2 Days
Quick claim estimate using your P&L accounts and industry averages to help you decide whether to proceed
1 - 3 Meetings
Detailed analysis of your R&D projects with comprehensive evidence gathering
30 - 60 Min Meeting
Breakdown of qualifying expenditure and cost categorisation for your R&D claim
3 - 6 Days
Complete technical narrative and financial report, compliance-approved and sent for your review
1 Day
Before submission, we'll review your company's tax position, confirm the expected treatment of the claim, and ensure all supporting documentation is ready for HMRC.
1 - 2 Days
Submission to HMRC either via your accountant or revisions to your tax documents, with all required documentation
Ongoing
HMRC processing (40 day target, 85% processed within that timeframe) plus ongoing support and claim defence
Fill in the boxes, your estimate updates as you type.
For financial periods starting on or after 1 April 2024
Total spend on qualifying R&D activities (staff, subcontractors, consumables, software, utilities).
Ready to discover your R&D tax relief potential? Contact us today for a comprehensive assessment of your eligibility.
info@lexmore.co.uk
Phone
020 3355 4717
Response Time
Within 24 hours
Common questions about R&D Tax Relief answered by our experts
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