Frequently Asked Questions

The UK R&D Tax Relief Scheme is a government incentive introduced in 2000 to encourage business innovation. It provides financial support through Corporation Tax reduction or direct cash payments based on qualifying R&D expenditure.

Read our complete guide to R&D Tax Relief for detailed information about eligibility, qualifying costs, and the claim process.

The amount depends on your qualifying R&D costs, company size, and accounting period. Average successful claims typically yield between 15-27% of qualifying R&D costs for SMEs and 10-15% for larger companies.

However, receiving these funds depends entirely on submitting a compliant, well-documented claim that meets HMRC's requirements. Many businesses miss out on their full entitlement due to incomplete documentation or misunderstanding of qualifying criteria.

TaxWorkz helps you identify all qualifying activities and costs, ensuring you claim everything you're entitled to.

Use our free R&D calculator to get an instant estimate of your potential claim value based on your specific costs and company profile.

The scheme provides vital funds for business growth through tax reductions or cash payments. These funds can be reinvested to fuel innovation, reduce tax liabilities, and maintain competitive advantage.

Any UK company subject to UK Corporation Tax can qualify if they undertake eligible R&D activities and incur qualifying costs. The scheme is accessible across diverse industries and is not limited by company size.

No, R&D Tax Relief is not limited to specific sectors. Businesses across software, manufacturing, healthcare, construction, agriculture, and more can qualify if they meet the core criteria.

No, the scheme is very accessible for SMEs with no minimum size requirement. With proper preparation and documentation, the process is manageable for smaller businesses.

A project qualifies if it seeks to advance science or technology by resolving scientific or technological uncertainty through a systematic approach. This includes creating new knowledge or making appreciable improvements in the overall field.

Learn more about the key criteria for qualifying R&D activities and see industry examples to help you identify eligible projects.

Yes, problem-solving often is R&D for tax purposes, especially if it involves addressing technical uncertainty where the solution wasn't easily known using existing knowledge.

No, you don't need to achieve a breakthrough or even succeed in your project. The scheme focuses on the attempt to resolve scientific or technological uncertainty through a systematic approach, even if the project is unsuccessful.

You can claim for qualifying costs directly related to R&D activities, including staffing costs (wages, NICs, pensions), consumable materials, software and cloud computing costs, and subcontractors/EPWs (subject to specific rules).

See our detailed breakdown of qualifying costs including restrictions, limitations, and examples of what can and cannot be claimed.

Costs generally excluded are marketing, sales, production, distribution, capital expenditure (unless through RDA scheme), patent/trademark creation, buildings/land, and advances in arts/humanities/social sciences.

From 1 April 2024, R&D work must generally take place in the UK, and subcontracting/EPW costs only qualify if paid through a UK payroll. Limited exemptions exist for necessary conditions or specialized facilities unavailable in the UK.

For periods before 1 April 2024, there were SME R&D Relief and RDEC schemes. From 1 April 2024, the Merged Scheme is default for all companies, with Enhanced R&D Intensive Support (ERIS) for qualifying loss-making SMEs.

Use our free R&D calculator to see which scheme you qualify for.

Enhanced R&D Intensive Support (ERIS) is for loss-making SMEs where qualifying R&D expenditure is at least 30% of total expenditure. This scheme offers a higher benefit rate compared to the standard Merged Scheme.

For SME, ERIS, and Merged schemes, the payable tax credit is capped at 300% of the company's relevant PAYE and NIC liabilities for the period, plus £20,000.

The process involves identifying qualifying projects, calculating costs, and submitting the mandatory Additional Information Form (AIF) with your Company Tax Return (CT600). First time claimants must also submit a Claim Notification Form within six months of the accounting period end.

View our step-by-step guide to the R&D claim process including timelines, required documentation, and best practices for a successful submission.

You need detailed technical documentation explaining the scientific/technological uncertainty, advance sought, and systematic work undertaken, plus financial documentation showing qualifying expenditure per project. Maintain contemporaneous records like project plans, timesheets, and test results. This documentation is crucial for compliance, which is why TaxWorkz guides you through creating comprehensive, HMRC compliant documentation with our AI powered validation system.

Learn how TaxWorkz helps you create HMRC-compliant documentation with our AI-powered validation system that ensures your claim meets all requirements.

This mandatory notification is required for first time claimants or companies who haven't claimed in the last three accounting periods. It must be submitted online within six months of the accounting period end.

The AIF is mandatory for every R&D tax claim from August 2023. It summarizes R&D expenditure and project details, and must be submitted before or with your Company Tax Return (CT600).

From 1 April 2023, companies claiming R&D tax relief for the first time, or those who haven't claimed in the last 3 accounting periods, must notify HMRC of their intention to claim within 6 months of their accounting period end.

This is critical: If you miss this notification deadline, you cannot claim R&D tax relief for that period at all, regardless of how much you spent on qualifying R&D activities.

The notification must be submitted before your CT600 tax return and must include details of your R&D projects. This is separate from the Additional Information Form (AIF) that accompanies your claim.

Check your specific deadlines now to ensure you don't miss this critical requirement.

You have two years from the end of the accounting period in which the R&D expenditure was incurred to submit your claim.

You can generally claim for R&D expenses for up to two accounting periods retrospectively, subject to notification rules for first time or infrequent claimants.

Processing typically takes 40 days or more. Delays often occur if HMRC requests additional documentation, so ensure your submission is complete and accurate.

Common mistakes include insufficient documentation, poor cost allocation, including ineligible activities, missing qualifying projects, and submitting incomplete forms. Many businesses also struggle with understanding what truly qualifies as R&D versus routine business activities. TaxWorkz helps you avoid these pitfalls with our systematic approach and AI validation.

Read about common misconceptions and how to avoid them to ensure your claim is successful and maximized.

Determining qualification can be complex. Your project must involve scientific or technological uncertainty that requires systematic investigation. Many businesses miss qualifying activities or include ineligible work. TaxWorkz uses AI to assess your projects and clearly identify which activities qualify, helping you maximise your claim while staying compliant.

Discover how TaxWorkz's AI-powered project identification system helps you uncover qualifying R&D projects you might have missed, with real-time validation against HMRC criteria.

Cost identification and apportionment is one of the biggest challenges. You need to accurately identify costs directly related to R&D activities and properly apportion mixed costs. TaxWorkz guides you through this process step-by-step, ensuring no qualifying costs are missed and helping you create accurate, defensible cost allocations.

By tracking costs as they occur throughout the year, you avoid the difficulty of trying to retrospectively identify and apportion costs months later. This continuous approach ensures more accurate cost capture and reduces the risk of missing qualifying expenditure.

Try our free R&D cost calculator to see how different cost categories and allocations affect your potential claim value.

By using TaxWorkz to log your R&D activities and costs as they happen throughout the year, you avoid the year-end rush and ensure every qualifying project is captured with full supporting evidence. This continuous tracking approach reduces the risk of missing claims and helps you maintain robust, HMRC compliant records.

Instead of trying to remember projects and costs months later, you create contemporaneous records that are more credible to HMRC and significantly reduce the stress of claim preparation. This systematic approach ensures nothing is forgotten and every qualifying activity is properly documented.

Learn how TaxWorkz's continuous tracking system helps you capture every qualifying project and cost as it occurs, creating robust records that are more credible to HMRC.

While HMRC supports genuine applications, enquiry rates have increased to over 20% of claims. Most checks are triggered by errors or insufficient documentation rather than deliberate fraud.

HMRC enquiries are increasing, with over 20% of claims being checked. Common reasons for enquiries include insufficient documentation, errors in claims, and suspected abuse.

Our AI-powered system ensures your claim is properly documented and compliant, significantly reducing the risk of enquiry and helping you build a robust case if one occurs.

Maintain detailed, robust, and comprehensive records from the outset. Ensure accurate cost allocation, provide clear technical narratives, apply correct scheme rules, and submit mandatory forms on time. TaxWorkz helps you achieve this with our AI-powered validation system that checks your responses against HMRC criteria in real-time, significantly reducing the risk of enquiry by ensuring your claim is properly documented and compliant.

Read our comprehensive guide to avoiding HMRC enquiries including common triggers, prevention strategies, and best practices for maintaining compliance.

Working with your qualified accountant is essential. TaxWorkz provides the document guidance you need through our AI-powered platform, preparing comprehensive documentation for your accountant while ensuring you identify all qualifying activities and costs. This collaboration gives you the best of both worlds; expert technology and professional oversight.

TaxWorkz breaks down the complex R&D claim process into manageable steps. Our AI-powered platform guides you through project assessment, cost identification, and documentation creation. We validate each step against HMRC criteria, ensuring your claim is compliant and complete. This systematic approach saves time, reduces errors, and maximises your claim value.

By enabling continuous tracking of projects and costs throughout the year, TaxWorkz eliminates the traditional year-end scramble. You log activities and costs as they happen, creating highly detailed records that are more credible to HMRC and significantly reduce claim preparation stress.

See our 4-step process in detail and learn how TaxWorkz saves 75% of preparation time while identifying 50% more qualifying projects.

TaxWorkz combines AI-powered validation with expert guidance to create a unique solution. Our platform doesn't just collect information, it validates responses in real-time against HMRC criteria, scores compliance, and provides instant feedback. This ensures your claim is robust and enquiry ready, while our systematic approach helps you identify qualifying activities you might have missed.

Explore TaxWorkz's unique AI-powered features including real-time validation, compliance scoring, and systematic project identification that sets us apart from traditional approaches.

Yes, 100%! TaxWorkz prepares the detailed technical project documentation your accountant needs for a compliant R&D claim, including justification for the mandatory Additional Information Form (AIF) and supporting reports. Your accountant handles the final submission and tax law complexities.

This collaboration ensures professional oversight and proper compliance, giving you the best chance of a successful claim. By providing your accountant with comprehensive, validated documentation from TaxWorkz, you can often reduce their time and costs while improving claim quality.