This definitive 2026 guide explains what an R&D claim is, who can claim, how it works under the updated UK regime, and how businesses can prepare, document, and file a compliant claim with confidence.
What Is an R&D Claim?
An R&D claim is a claim made to HMRC for corporation tax relief or a taxable credit in respect of qualifying research and development expenditure. It rewards companies that seek scientific or technological advancement by allowing additional deductions or credits for relevant project costs.
In short: If your company is solving technical or scientific uncertainty to make something new or significantly improved, you might be eligible to make an R&D claim.
What Changed in R&D Tax Relief for 2024–2026?
A major overhaul took effect for accounting periods starting on or after 1 April 2024, consolidating prior schemes and introducing new rules:
- Merged R&D Scheme: The traditional SME and RDEC schemes were replaced with a single merged RDEC system for most companies, simplifying the landscape.
- Enhanced R&D Intensive Support (ERIS): A special top-up credit was introduced for eligible R&D-intensive loss-making companies to offer stronger support.
- Additional Information Form (AIF): Before submitting an R&D claim, companies must now complete and upload an AIF with detailed project and cost information.
- Overseas subcontractor and EPW restrictions: For qualifying periods beginning on/after 1 April 2024, many overseas subcontractor and externally provided worker (EPW) costs are excluded, unless specific conditions are met.
These changes aim to increase compliance and ensure relief is targeted at genuine UK innovation activity.
Who Can Make an R&D Claim in the UK?
Your company can make an R&D claim if:
- It is a UK-registered limited company subject to corporation tax
- It has incurred qualifying R&D expenditure in a relevant accounting period
- Its activities involve seeking an advance in science or technology
- Sole traders, partnerships without corporation tax treatment, and individuals cannot make direct R&D claims — although partnerships can sometimes do so via a nominated corporate partner.
What Qualifies as R&D for Tax Purposes?
Qualifying R&D isn’t about business risk or commercial challenge. HMRC defines R&D in terms of technical or scientific uncertainty and advancement:
To qualify, the work must:
- Aim to achieve scientific or technological advancement
- Encounter uncertainty that competent professionals can’t readily resolve
- Involve systematic investigation and testing
- Be recorded and evidenced properly
Examples of qualifying activities include:
- Developing new software algorithms where existing solutions are inadequate
- Creating new manufacturing processes that require engineering innovation
- Testing novel hardware configurations to eliminate technical failures
- Integrating systems in ways where outcomes are not well known
Activities that typically do not qualify include routine software maintenance, adaptation of off-the-shelf solutions without scientific advance, and commercial or market research.
What Costs Can You Include in an R&D Claim?
Relevant qualifying costs under the merged RDEC/ERIS regime include:
1. Staffing Costs
Wages, NIC, and pension contributions for staff directly involved in R&D work.
2. Subcontractor Costs
Costs paid to subcontractors for R&D work — subject to the post-2024 contracting-out and overseas exclusions.
3. Externally Provided Workers (EPWs)
Agencies and similar arrangements where a worker provides R&D support — again with restrictions for overseas arrangements.
4. Consumables and Materials
Items used up in experiments, development, or testing.
5. Software, Cloud, and Data Costs
Where software or cloud resources are necessary for R&D, appropriate cost apportionment may be included.
6. Contributions to Independent Research
Certain collaborative research contributions may be eligible.
Costs that usually do not qualify include routine overheads, capital equipment (unless under special apportionment rules), and costs incurred before the relevant R&D period.
Important: Overseas subcontractor and EPW costs are excluded from most R&D claims unless specific residency conditions are met for periods on/after 1 April 2024. It’s vital to classify and support these costs carefully to avoid disallowed claim elements.
R&D Credit Rates (2026)
Under the merged scheme, R&D claims generally operate through an R&D Expenditure Credit (RDEC) mechanism, which provides a taxable credit based on qualifying spend.
The headline RDEC credit rate is 20% of qualifying expenditure (before tax adjustments), producing a net benefit once corporation tax is considered.
For loss-making, R&D-intensive companies, the ERIS top-up can significantly increase the refund received.
The actual benefit depends on your company’s tax position and the mix of qualifying costs.
Step-by-Step: How to Make an R&D Claim (2026)
Making an R&D claim involves both a technical narrative and a financial computation:
1. Identify R&D Projects
List activity where technical/scientific uncertainty was addressed and resolved.
2. Map Qualifying Costs
Assign staff time, subcontractor costs, consumables, and software to the eligible R&D work.
3. Prepare the Technical Narrative
Explain:
- The challenge/uncertainty
- Why knowledge was not readily available
- How the project sought to resolve it
- What outcomes were achieved
This narrative is central to HMRC’s assessment.
4. Complete the Additional Information Form (AIF)
The AIF captures detailed project descriptions and cost summaries and must be submitted before the tax return.
5. File the Corporation Tax Return (CT600)
Include the R&D numbers in your CT600 computations and attach required summaries.
6. Maintain a Defensible Evidence Pack
Timesheets, meeting notes, project logs, code repositories, design files — all help support the claim in case of HMRC review.
Common R&D Claim Errors to Avoid
Even eligible companies can have claims scaled back or queried due to:
- Weak technical descriptions that don’t demonstrate uncertainty
- Misclassification of costs, especially overseas subcontractor/EPW amounts
- Lack of clear evidence tying costs to R&D activities
- Wrong apportionment of staff time
- Missing or incorrect AIF submission
Strong documentation and professional oversight significantly improve defensibility and HMRC acceptance.
Providing Evidence That Withstands HMRC Scrutiny
High-quality R&D claims are backed by a well-organised evidence pack, including:
- Time tracking and project logs
- Technical design and testing documents
- Development environment records (code repos, experiments)
- Meeting notes and decision rationales
- Cost worksheets linking spend to activities
The stronger your evidence, the lower the risk of adjustments or enquiries.
R&D Claims for Groups, International Teams, and Outsourced Development
More complex organisational structures require extra care:
- Group companies: Ensure costs are correctly attributed and not double-claimed.
- International staff or contractors: Post-2024 overseas cost limits require clear residency and operational evidence.
- Outsourced R&D: Contract terms and project control details matter for claim eligibility.
- Cross-jurisdiction projects: Align UK claims with global obligations and arm’s-length clarity.
Working with advisors who understand international and group complexities is often essential.
How Persona Finance Helps with R&D Claims
At Persona Finance, we specialise in end-to-end R&D claim support that stands up to scrutiny and maximises your entitlement:
🔹 Eligibility Assessment & ScopingWe evaluate projects and costs with your technical leads and finance teams.
🔹 Costing & Documentation StrategyWe build accurate apportionment models and link records to qualifying activity.
🔹 Technical Narrative & AIF PreparationOur team helps craft narratives that highlight genuine uncertainty and advancement.
🔹 HMRC-Ready Evidence PacksDefensible documentation, organised for enquiries and compliance.
🔹 Tax Return IntegrationWe ensure your R&D claim fits seamlessly into your CT600 filing with supporting computations.
Whether you are a startup innovating software or an established business modernising production, Persona Finance ensures your R&D claim process is clear, compliant, and optimised for results.
Frequently Asked Questions About R&D Claims (FAQs)
Can a loss-making company claim R&D relief?
Yes — under the merged scheme with ERIS, loss-making companies with high R&D intensity can receive a payable credit.
Do software development costs qualify?
Yes, where technical uncertainty and advancement are demonstrated beyond routine coding tasks.
Is it too late to claim for prior periods?
You can generally claim R&D relief up to two years from the end of the accounting period.
Can I include overseas subcontractor costs?
Post-April 2024 rules restrict most overseas subcontractor and EPW costs unless specific conditions are met.
How detailed does the AIF need to be?
It should clearly describe projects, uncertainties, achievements, and cost breakdowns to support the claim fundamentally.
Take Action: Check Your Eligibility and Prepare Now
The 2026 R&D regime rewards genuine innovation but demands careful preparation, strong evidence, and clear documentation.
If your company is developing new technology, processes, or products — now is the time to assess eligibility and structure a compliant, high-quality R&D claim.
👉 Contact Persona Finance for expert support in preparing and submitting your R&D claim, ensuring maximised relief and minimum compliance risk.
