SimpleReturns

R&D tax relief: an honest guide for small companies

Reviewed by Lee Jones, Founder · Updated 17 July 2026
The short answer

R&D tax relief is real. It is also much narrower than the phone calls make it sound. To qualify, your company must be trying to make an advance in science or technology for the whole field, not just for your own business, by solving a problem that even an expert could not see the answer to.

Official source. This guide is a plain-English summary of official GOV.UK guidance, not advice. The authoritative source is Corporation Tax R&D relief on gov.uk. Always rely on that over our summary.

What actually counts as R&D?

The rules set a high bar, and the wording matters. Your project must seek an advance in a field of science or technology by resolving scientific or technological uncertainty. Two parts of that carry all the weight:

The advance must be for the overall field, not just for your business. Doing something that is new to your company does not count if the rest of the world already knows how to do it.

The uncertainty must be real. In HMRC's words, uncertainty exists when an expert on the subject cannot say whether something is technologically possible, or how it can be done, even after checking all the available evidence. If a capable professional could sit down and work it out from what is already known, that is skilled work, but it is not R&D.

Two examples make the line clearer:

  • Maybe qualifies: your team spends months building a new kind of algorithm to crack a problem nobody in the field has solved, and experienced engineers genuinely did not know at the start whether it could be done. That is the shape of a real claim.
  • Does not qualify: you build a website, an app or an online shop using existing tools and known techniques. It might be new for you, hard work, and commercially clever. None of that makes it an advance in technology itself.

Work in the arts, humanities or social sciences, including economics, never qualifies, however original it is.

Someone rang me saying my company is owed thousands. Should I listen?

Be careful. There is a whole industry of firms that cold-call small companies, promise a large R&D refund, and take a cut of whatever is claimed. Some are diligent. Others will dress up ordinary work as R&D because their fee depends on a claim going in, not on it being right.

Here is the part the phone call skips: the claim goes on your company's tax return, so your company answers for it. HMRC can refuse or unwind a claim that does not stand up, and every claim now has to name the senior person at your company who is responsible for it, in writing. The caller's cut is gone either way; the problem stays with you.

A simple test: if the person on the phone cannot explain, in plain English, what advance in science or technology your project made for the whole field, and what an expert could not have worked out, they are describing a claim that fails the definition.

What does claiming actually involve?

More than it used to, which is deliberate. For accounting periods beginning on or after 1 April 2024, claims go through a single merged scheme, which works as an expenditure credit at a rate of 20% of your qualifying R&D costs, with a separate, more generous route for loss-making companies whose spending is heavily weighted towards R&D. The older small company scheme has closed for those periods.

The paperwork has two hard gates:

  1. Telling HMRC in advance. If this is your first claim, or your first for some years, you must send HMRC a claim notification form, generally within 6 months of the end of the period the claim covers. Miss that window and the claim is invalid before it starts.
  2. The additional information form. Every claim must come with a detailed form describing each project: the field, what was already known, the advance you sought, the uncertainties you faced and how you tackled them, plus the costs and the names of the responsible officer and any agents. It must arrive before or with your Company Tax Return. No form, no claim: HMRC removes it from your return.

That is not a form you dash off. It is a technical narrative that has to survive expert reading.

So who should handle it?

Not us, and we will be straight about why. A real R&D claim needs someone who can judge the science-or-technology test, build the project narrative, and defend it if HMRC asks questions. That is specialist accountant work, done for a fee you agree up front, and it is worth paying for when the claim is genuine. Our guide on when a limited company needs an accountant covers how to pick one.

What you should not do is bolt a speculative claim onto an otherwise simple year because someone on the phone made it sound free. It is not free. It is a statement on your company's tax return with your name behind it.

Common questions

Is R&D tax relief a scam?

No. The relief is real and companies doing genuine research use it every year. The scams, where they exist, are in how it gets sold to companies whose work does not qualify.

My product is the first of its kind in my industry. Does that count?

Not by itself. The advance has to be in the science or technology, for the whole field. A first-in-your-industry product built with existing, well-understood technology does not meet the definition.

Can I claim for past years?

The rules changed by accounting period, and first-time claims now usually need advance notice within a strict window, so what is open to you depends on your dates. This is exactly the question to put to a specialist accountant rather than guess.

What happens if HMRC disagrees with a claim?

Claims without the required forms are simply not accepted, and HMRC writes to confirm the claim has been removed from your return. A claim that is filed but does not stand up can be challenged, which means time, professional fees and repaying money your company may have already spent.

No R&D claim? Then your year might be simpler than you think

If your company's year is straightforward, with no R&D claim in it, you do not need a specialist to file. SimpleReturns turns your bank statement and a few plain-English questions into both filings, HMRC and Companies House, for £99 in total. Free to start, no card needed. And if you do have a genuine R&D claim, we will say what we just said: take it to a specialist accountant, because that is the honest answer.

Start your return

And if anyone promises you free money on the phone, now you know the questions to ask them.

General guidance, not advice. This guide explains how the rules generally work for small UK limited companies. It isn't tax advice for your specific situation, if you're unsure, check with us or an accountant.