R&D tax credits under the merged scheme

R&D relief has been through a reformation: years of abusive claims brought mass HMRC enquiries, tighter rules and a merged scheme. The relief is still real and still generous — for companies doing genuine development work who claim it properly.

What qualifies (and what doesn't)

The test is unchanged in essence: a project seeking an advance in science or technology, by resolving scientific or technological uncertainty that a competent professional couldn't readily resolve. Building software with novel technical challenges can qualify; building a website with standard tools does not. Developing a new manufacturing process can qualify; installing standard machinery does not. The honest question: did your team have to figure out something genuinely non-obvious at a technical level? If a competent professional could have looked up or routinely produced the answer, it isn't R&D.

What it pays

The merged scheme gives a taxable expenditure credit of 20% on qualifying spend — staff costs (the usual bulk), externally provided workers, subcontracted R&D within the rules, software, consumables and some data/cloud costs. Net benefit after tax lands around 15–16p per £1 of qualifying spend; loss-making R&D-intensive SMEs have an enhanced route paying more.

Claiming without the enquiry

Every claim needs an Additional Information Form naming projects, describing the uncertainty and advance, and breaking down costs — and HMRC now reads them. Claims survive when the technical narrative is written by people who understand both the technology and the legislation, costs trace cleanly to the projects, and nobody has stretched a routine project into 'innovation'. That's why we start with a free, honest eligibility review and decline weak claims: a rejected or clawed-back claim with penalties costs far more than never claiming.