R&D tax credits provide tax relief based on the R&D costs that your company incurs and can be used to either reduce the amount of corporation tax your company pays, or to receive cash back from HMRC. They’re important when it comes to cash planning and maximising your business’s EBITDA.

What is R&D tax credits scheme?

UK R&D tax credits are a government‑backed incentive designed to reward companies that invest in research and development. Administered by HMRC, the scheme allows eligible UK businesses to lower their corporation tax bill or receive a payable tax credit for qualifying R&D expenditure. If your company is developing new products, processes or services, or improving existing ones, and faces scientific or technological uncertainty in doing so, you may be able to claim R&D tax relief.

The R&D tax credit scheme is available across a wide range of sectors and applies whether projects are successful or not. Qualifying costs can include staff salaries, subcontracted R&D, consumables and certain software costs. Claims are made as part of your corporation tax return and must clearly demonstrate a technological advance, the uncertainties faced, and the systematic work undertaken to resolve them.

There are two schemes available at the moment:

• The merged Research and Development Expenditure Credit (RDEC) applies to most companies and provides a benefit of approximately 15%–16% of qualifying R&D spend, depending on the corporation tax rate. This credit is accounted for above the line, meaning it can positively impact key performance measures such as EBITDA, as well as improving reported profitability and cash flow.

• The second scheme is targeted specifically at R&D‑intensive, loss‑making businesses. Under this scheme, eligible companies can claim a payable cash credit of up to 27% of qualifying R&D expenditure, providing valuable funding support at an early or high‑investment stage of growth.

Used correctly, R&D tax credits can provide a significant cash injection to reinvest in innovation, growth and future R&D activity.

What is the R&D process?

Pre-notification

If you need to notify HMRC about your intention to make an R&D claim, this must be done within six months of the accounting period end. Failure to do so will result in any subsequent claim submission being rejected. We can help your business assess whether they need to submit a pre-notification and ensure your claim is protected.

1. The first step to any claim is to identify the eligible activities

The R&D tax credit rules are complex, and many businesses struggle to correctly identify the boundaries of the eligible work, either missing out on the benefit or including activity incorrectly. Our experts will talk you through the complex rules, help identify what’s eligible, and will test the assessment to ensure everyone is comfortable with the claim.

2. Preparation of claim documentation

We prepare an HMRC ready documentation with plain English project narratives, transparent cost schedules and full reconciliations, all aligned to Additional Information Form (AIF) requirements. Our team captures the competent professional’s evidence and helps capture contemporaneous information to support the claim. The result is a clear, defensible submission that minimises disruption to your technical and helps you submit a robust R&D claim.

3. The next step is to pull the claim together and create a report for HMRC

Our specialists can produce the report for you or assist with reviewing the documentation created by your internal team. When producing the claim, we’ll be open and transparent with the claim documentation, ensuring you understand what is being included.

4. The final step is to submit the claim to HMRC

Claimants are required to submit a formal Additional Information Form (AIF) prior to submitting any R&D claim via a corporation tax return. This form specifies what information relating to the R&D projects, the costs involved, and the workers involved in claim that HMRC want to see to process any claim. There are strict rules around the time of submitting your claim via the online AIF and the CT600, we can work with the Buzzacott tax team or your tax advisor to submit the claim in compliance with HMRC’s requirements.

What happens after the application has been submitted?

HMRC aims to process many claims in 40 days (this is an aim, not a guarantee). Timing depends on complexity, workloads and whether HMRC opens checks. We monitor progress and respond to any queries.

Compliance checks

HMRC have ramped up the number of claims subject to a check to ensure that the claim is accurate. These checks can happen before the claim is paid out or after payment is made up to the statutory enquiry window. If issues are found and the claim has been overstated, HMRC will request that any overpayment is returned. Currently, HMRC is reviewing 20% of claims. Most businesses can expect to see a compliance check in the next couple of years.

By working with HMRC on complex claims and staying up to date with HMRC policy, we understand the information it needs and, more importantly, why. With our support, you can be sure to share exactly the right details to satisfy HMRC’s requirements and minimise the risk of an enquiry from HMRC. We can provide a claim check service to identify your risk, or we support you with reviewing your current claim.

How we can help you take the stress out of your R&D tax credits submission

Buzzacott’s R&D team are dedicated specialists who solely work on R&D claims. Our team has backgrounds in engineering, science and policy, allowing us to thoroughly understand the eligible work undertaken by your business. As a regulated firm, we provide advice that you can trust.

We can also provide you with a joined-up service with our tax and accountancy teams who have in-depth knowledge of tax legislation in the UK. We’re also members of PrimeGlobal which, should there be an international element to your claim, gives us access to trusted overseas tax experts who can help ensure that your claim provides the benefit expected.

Not happy with a current or recent claim?

Ask for a free claim review. We’ll highlight process risks (notification/AIF), boundary issues and missed opportunities under the merged regime and ERIS.

We offer a rightsized service - either full, end-to-end preparation or targeted support that slots into your in-house process (for example, reviewing AIF-ready narratives, cost schedules, or reconciliations). You choose the scope and we provide clear deliverables and pragmatic feedback, so you only pay for the support you need and keep control of timelines.