Claiming Research and Development (R&D) tax reliefs
Find out if you can claim Corporation Tax relief on your Research and Development (R&D) project.
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 standard definition of R&D.
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 as R&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
- 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.
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.
More information is available:
- about the standard definition of R&D in CIRD81900 of the Corporate Intangibles Research and Development Manual
- in the guidelines on the meaning of research and development for tax purposes
Types of R&D tax relief
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 not.
Small and medium-sized enterprise (SME) R&D tax relief
You can claim SME R&D tax relief 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 will need to include partner and linked enterprises when you work out if you’re a SME.
R&D expenditure credit (RDEC)
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.
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. Read the guidance which tells you when you need to notify, the information you will need to provide and how to send it.
From 1 August 2023 you must submit an additional information form to support your claim. Read the guidance which tells you how to send the information and what you will need to provide. You can submit it before 1 August 2023 if you want to give us more information.
Last updated 1 April 2023 + show all updates
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.
Updated to show the Research and Development Expenditure Credit will increase to 13% of qualifying research and development expenditure from 1 April 2020.
The guidance has been updated to show new rates for 2018.
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.
The link free pre-recorded webinar in Further information section has been updated.
A new pre-recorded webinar for R&D Advance Assurance has been added to this page.
A new pre-recorded webinar giving an overview on Advance Assurance has been added to this page.
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.
This guidance has been updated to include information about R&D Advance Assurance.