Does my business qualify for R&D tax relief?

Your company can claim if it is subject to UK Corporation Tax, has carried out projects that meet HMRC's R&D criteria and has incurred qualifying costs. Qualifying work is not limited to laboratories: it includes developing new products, processes or services, improving systems, customising software, engineering, prototyping and testing, in sectors from software and manufacturing to construction, life sciences and creative media.

Can a loss-making company claim R&D tax relief?

Yes. You do not need to be profitable to benefit: a loss-making company can receive a cash credit for eligible R&D activity.

What costs can I include in an R&D claim?

Qualifying costs typically include the salaries, National Insurance and pension contributions of staff working on R&D, including a share of support staff; externally provided workers and subcontractors, within limits; software and cloud computing used directly in R&D; consumables such as materials and prototypes; clinical trials; and data costs. Costs must relate directly to the R&D activity and fall within the relevant accounting period.

How and when do I make an R&D claim?

You claim through your company's Corporation Tax return (CT600), either in your normal filing or in an amended return, within two years of the end of the accounting period in which the R&D took place. Before that, you must submit an additional information form with a breakdown of the qualifying costs and a description of the projects: the advance you were seeking, the uncertainties you faced and how you tried to overcome them. If your company is claiming for the first time, or has not claimed in the last three years, you must also notify HMRC within six months of the end of the period of account.

How does P10 Financial help with R&D claims?

P10 Financial identifies qualifying activities across your business, prepares the technical report and cost schedule, submits the claim through your CT600 and defends it if HMRC raises queries. The team also helps you build a repeatable process for future years.

R&D Tax Relief in the UK

Supporting Business Innovation Through Strategic Tax Relief

Research and Development (R&D) Tax Relief is one of the UK’s most valuable incentives for innovation-led businesses. Introduced by the government to drive economic growth and technological progress, it provides a powerful opportunity for companies of all sizes to reclaim a portion of their R&D expenditure, either as a reduction in Corporation Tax or as a direct cash injection.

Yet, many businesses still don’t realise they’re eligible. At P10 Financial, we specialise in identifying qualifying projects, maximising relief, and managing the claims process end to end, ensuring that no value is left on the table.

What Is R&D Tax Relief?

R&D Tax Relief is not limited to “white lab coats and science labs.” It applies to businesses solving technical problems, improving internal systems, developing prototypes, or enhancing existing products and processes.

The goal of R&D tax relief is simple: to reward companies that take risks to overcome scientific or technological uncertainty, where the outcome is not readily deducible or available in the public domain.

In practice, this includes:

Developing new products, processes or services
Enhancing existing systems to deliver better performance or efficiency
Integrating or customising software and platforms
Engineering materials, mechanical designs or automation tools
Running prototypes, trial and error, or extensive testing

Who Is Eligible?

To claim, your company must:

Be subject to UK Corporation Tax
Have carried out R&D projects that meet HMRC’s eligibility criteria
Have incurred qualifying costs during the process

You do not need to be profitable to benefit. Even loss-making companies can receive a cash credit for eligible R&D activity.

For accounting periods starting on or after 1 April 2024, the SME scheme and RDEC were replaced by two schemes: enhanced support for loss-making, R&D intensive SMEs, and a merged expenditure credit for everyone else.

Enhanced R&D Intensive Support (ERIS)

This scheme is for loss-making SMEs that are R&D intensive, meaning companies with:

Fewer than 500 staff
Either turnover under €100 million or a balance sheet total under €86 million
Relevant R&D expenditure of at least 30% of total expenditure, including that of connected companies

If eligible, you can:

Deduct an additional 86% of qualifying R&D costs when calculating your trading loss
Surrender the loss for a payable tax credit worth up to 14.5% of the surrenderable loss

For every £100,000 of eligible R&D expenditure, this could equate to up to £26,970 in cash from HMRC (14.5% of £186,000), subject to a cap linked to your PAYE and National Insurance bill.

Merged R&D Expenditure Credit (RDEC) Scheme

This scheme is for:

Large companies (over the SME threshold)
SMEs that do not qualify for ERIS, or choose not to claim it

Under the merged scheme, companies receive a taxable credit of 20% of qualifying R&D expenditure. This can be used to offset Corporation Tax or, in some cases, received as a cash credit.

What Types of Activity Qualify?

A qualifying R&D project must aim to make an advancement in science or technology, and must involve overcoming some level of technical uncertainty.

Examples of qualifying sectors and activities include:

Software & IT: Building bespoke software, integrating APIs, cloud infrastructure, cybersecurity systems
Engineering & Manufacturing: Product development, production process innovation, automation, use of robotics
Construction & Property: Innovative materials, modular construction, building energy performance improvement
Life Sciences: Pharmaceutical trials, biotech innovation, healthcare platform development
Creative & Media: Game development, animation pipeline improvements, production workflow enhancements

If you’ve spent time and money solving difficult technical problems, adapting systems, or developing new offerings, there’s a strong chance your business qualifies.

What Can You Claim For?

Qualifying R&D costs typically include:

Employee costs: Salaries, NICs, pension contributions of R&D staff (including a percentage of support staff)
Externally provided workers: Agency workers, consultants (with some limits, including on overseas costs)
Subcontractors: 65% of payments to unconnected third parties for R&D you contract out (connected subcontractors follow different rules, and overseas costs are restricted)
Software and cloud computing: Licenses used directly in R&D
Consumables: Materials, prototypes, utilities used up during the R&D process
Clinical trials: For life sciences companies
Data costs: Usage and acquisition of datasets for R&D

Costs must relate directly to the R&D activity and fall within the relevant accounting period. P10 Financial ensures your claim is accurate, defensible, and maximised.

When and How to Claim

You can submit an R&D tax relief claim through your Corporation Tax return (CT600), either as part of your regular filing or through an amended return. Claims must be submitted within two years of the end of the accounting period in which the R&D took place.

Before you claim, you must submit an additional information form setting out your qualifying costs and projects, before or on the same day as your CT600: without it, HMRC will not accept the claim. If your company is claiming for the first time, or has not claimed in the last three years, you must also send HMRC a claim notification within six months of the end of the period of account, or the claim will be invalid.

HMRC now expects a clear, structured technical narrative alongside your claim, explaining:

The nature of the advance attempted
The uncertainties faced
The methods used to overcome them
A breakdown of the qualifying costs

Incorrect or poorly presented claims risk delays or even HMRC enquiry. That’s why professional advice is essential.

Accountancy Director Chris Morris

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Accounts Manager Katie Miller

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Accounts Assistant Lois Collin

Why Work with P10 Financial?

At P10 Financial, we bring together tax expertise, sector knowledge, and hands-on support to deliver successful R&D claims, without the jargon or the hassle.

Our team works closely with business owners, financial controllers, and technical leads to: