[{"data":1,"prerenderedAt":3256},["ShallowReactive",2],{"en-blog/hmrc-rd-tax-credits":3,"en-global-content":965,"en-article-global-content":2188,"en-blog-article-more-articles-4c34e454-8993-474f-a2d1-5c1f6a260e14":2448,"en-blog-article-more-articles-208802952":3244,"MarkdownRenderer_6qGUB5DPFJpJ8p4ee0EnYcfnh1Kt5NXWaSoylj7tlGw":3249},{"name":4,"created_at":5,"published_at":6,"updated_at":7,"id":8,"uuid":9,"content":10,"slug":953,"full_slug":954,"sort_by_date":52,"position":955,"tag_list":956,"is_startpage":29,"parent_id":957,"meta_data":52,"group_id":958,"first_published_at":959,"release_id":52,"lang":58,"path":52,"alternates":960,"default_full_slug":954,"translated_slugs":961},"How HMRC research & development (R&D) tax credits work","2022-10-24T17:00:02.842Z","2026-03-12T10:47:18.012Z","2026-03-12T10:47:40.928Z",208802952,"87a51d0f-f4f2-464e-b834-6e65b73f9826",{"_uid":11,"roles":12,"title":4,"author":13,"topics":68,"content":99,"category":845,"language":870,"component":858,"heroMedia":873,"sidebarCta":880,"publishedAt":881,"readingTime":882,"redirectUrl":23,"listingImage":883,"metaDescription":884,"componentsAfterTheArticle":885},"fb239aa1-ad80-48af-8015-0473b9730bf2",[],{"name":14,"created_at":15,"published_at":6,"updated_at":16,"id":17,"uuid":18,"content":19,"slug":50,"full_slug":51,"sort_by_date":52,"position":53,"tag_list":54,"is_startpage":29,"parent_id":55,"meta_data":52,"group_id":56,"first_published_at":57,"release_id":52,"lang":58,"path":52,"alternates":59,"default_full_slug":51,"translated_slugs":60,"_stopResolving":67},"James Bennett","2022-10-19T17:38:48.575Z","2026-03-12T10:47:21.651Z",206165132,"40bc0124-1394-45bb-94e2-034c5971f9de",{"_uid":20,"name":14,"links":21,"picture":36,"lastName":38,"component":39,"firstName":40,"description":41},"2d5f546a-a154-44fc-9a41-d880b172ad4a",[22],{"tag":23,"_uid":24,"icon":25,"link":30,"type":23,"label":23,"style":34,"component":35,"onClickEvent":23,"openInANewTab":29,"horizontalFill":29},"","6abe99a5-65cf-4c49-8141-af06bbba6e9f",{"id":26,"alt":23,"name":23,"focus":23,"title":23,"filename":27,"copyright":23,"fieldtype":28,"is_external_url":29},4129791,"https://a.storyblok.com/f/146026/x/315bd7d0c7/ic_linkedin.svg","asset",false,{"id":23,"url":31,"linktype":32,"fieldtype":33,"cached_url":31},"https://www.linkedin.com/in/james-bennett-7213a7152/","url","multilink","primary","cta",{"alt":37,"name":23,"focus":23,"title":23,"filename":37,"copyright":23,"fieldtype":28,"is_external_url":29},"https://a.storyblok.com/f/146026/433x433/2b81a91dee/james.jpeg","Bennett","author","James",{"type":42,"content":43},"doc",[44],{"type":45,"content":46},"paragraph",[47],{"text":48,"type":49},"James Bennett is part of Spendesk's UK & Ireland market team, where he helps businesses spend smarter every day. ","text","james-bennett","blog/author/james-bennett",null,-660,[],176408854,"d89ac421-ed73-42a5-89e3-214368bdc591","2022-11-02T15:25:51.495Z","default",[],[61,63,65],{"path":51,"name":52,"lang":62,"published":52},"fr",{"path":51,"name":52,"lang":64,"published":52},"de",{"path":51,"name":52,"lang":66,"published":52},"es",true,[69],{"name":70,"created_at":71,"published_at":72,"updated_at":73,"id":74,"uuid":75,"content":76,"slug":87,"full_slug":88,"sort_by_date":52,"position":89,"tag_list":90,"is_startpage":29,"parent_id":91,"meta_data":52,"group_id":92,"first_published_at":93,"release_id":52,"lang":58,"path":52,"alternates":94,"default_full_slug":88,"translated_slugs":95,"_stopResolving":67},"Finance strategy","2022-10-19T17:57:50.961Z","2026-09-29T09:13:54.941Z","2026-09-29T09:13:54.957Z",206171406,"4c34e454-8993-474f-a2d1-5c1f6a260e14",{"seo":77,"_uid":85,"name":70,"component":86},[78],{"_uid":79,"noIndex":29,"component":80,"metaFields":81},"a850324e-c837-4a13-8f8f-4fbe4fd15397","seo",{"_uid":82,"plugin":83,"description":84},"e114f30f-fa13-4ca9-8e17-57f0f612f8ec","meta-fields","Long-term thinking on finance strategy: budgeting, forecasting, and the frameworks finance leaders use to plan for growth.","11f616ce-9f54-42bb-967c-fdb960b62cef","tag","finance-strategy","blog/topic/finance-strategy",-100,[],176456153,"5a788f5a-b853-4a56-959b-15a4ea69fd80","2022-11-02T15:24:54.143Z",[],[96,97,98],{"path":88,"name":52,"lang":62,"published":52},{"path":88,"name":52,"lang":64,"published":52},{"path":88,"name":52,"lang":66,"published":52},{"type":42,"content":100},[101,105,109,113,117,158,162,172,179,186,190,200,206,210,231,257,261,266,279,320,324,328,333,337,342,346,360,364,384,388,393,397,407,459,463,513,517,518,523,527,531,535,540,544,577,581,585,602,607,617,621,636,640,644,654,658,663,673,683,687,691,696,700,704,722,726,731,735,739,765,769,774,778],{"type":45,"content":102},[103],{"text":104,"type":49},"Smart companies use specific tax relief schemes to invest in their own growth. Research and development tax credits are a good example of such a scheme which is also designed to benefit industry and economic growth outside any one company.",{"type":45,"content":106},[107],{"text":108,"type":49},"It’s a great opportunity for companies hoping to break new ground. But as with all tax-related opportunities, it comes with an administrative cost.",{"type":45,"content":110},[111],{"text":112,"type":49},"The claim itself is reasonably simple. But you can’t claim tax relief on research expenses unless you can measure those expenses easily. And this is where most companies fall down. Until now.",{"type":45,"content":114},[115],{"text":116,"type":49},"This gives strategic advice in two main sections:",{"type":118,"attrs":119,"content":122},"ordered_list",{"order":120,"key":121},1,"ol-0",[123,141],{"type":124,"content":125},"list_item",[126],{"type":45,"content":127},[128,133,135,139],{"text":129,"type":49,"marks":130},"A",[131],{"type":132},"bold",{"text":134,"type":49}," ",{"text":136,"type":49,"marks":137},"breakdown of what HMRC’s R&D tax credit scheme is",[138],{"type":132},{"text":140,"type":49},", how it works, and who can claim. If you’re brand new to this, start at the top.",{"type":124,"content":142},[143],{"type":45,"content":144},[145,149,151,156],{"text":146,"type":49,"marks":147},"A clear strategy to manage your claims better",[148],{"type":132},{"text":150,"type":49},". If you know the “what” but are struggling with ",{"text":152,"type":49,"marks":153},"how to do it efficiently",[154],{"type":155},"italic",{"text":157,"type":49},", head straight for part 2.",{"type":45,"content":159},[160],{"text":161,"type":49},"The overall goal is to show how much simpler claiming your R&D tax credit can be, with the right systems in place. So let’s begin.",{"type":163,"attrs":164},"blok",{"id":165,"body":166},"3f0cf70d-fe9b-4549-8041-d5c8af494edc",[167],{"_uid":168,"text":169,"color":170,"title":23,"component":171},"i-9d1fcc0a-0e60-403d-9464-98943545d781","**Note:** This article is designed to explain certain concepts and illustrate how you *could* claim HMRC tax credits. It should not be read as legal or financial advice. Seek professional help if you’re unsure about the UK tax system.","purple","callout",{"type":163,"attrs":173},{"id":165,"body":174},[175],{"_uid":176,"html":177,"component":178},"i-a750ec8a-6678-4a9b-9627-0918598dc4dd","\u003C!--HubSpot Call-to-Action Code -->\u003Cspan class=\"hs-cta-wrapper\" id=\"hs-cta-wrapper-9bd0c073-d538-46b3-842f-0cfcc67d3835\">\u003Cspan class=\"hs-cta-node hs-cta-9bd0c073-d538-46b3-842f-0cfcc67d3835\" id=\"hs-cta-9bd0c073-d538-46b3-842f-0cfcc67d3835\">\u003C!--[if lte IE 8]>\u003Cdiv id=\"hs-cta-ie-element\">\u003C/div>\u003C![endif]-->\u003Ca href=\"https://cta-redirect.hubspot.com/cta/redirect/2694209/9bd0c073-d538-46b3-842f-0cfcc67d3835\" >\u003Cimg class=\"hs-cta-img\" id=\"hs-cta-img-9bd0c073-d538-46b3-842f-0cfcc67d3835\" style=\"border-width:0px;\" height=\"375\" width=\"750\" src=\"https://no-cache.hubspot.com/cta/default/2694209/9bd0c073-d538-46b3-842f-0cfcc67d3835.png\"  alt=\"New call-to-action\"/>\u003C/a>\u003C/span>\u003Cscript charset=\"utf-8\" src=\"https://js.hscta.net/cta/current.js\">\u003C/script>\u003Cscript type=\"text/javascript\"> hbspt.cta.load(2694209, '9bd0c073-d538-46b3-842f-0cfcc67d3835', {\"useNewLoader\":\"true\",\"region\":\"na1\"}); \u003C/script>\u003C/span>\u003C!-- end HubSpot Call-to-Action Code -->","embed",{"type":180,"attrs":181,"content":183},"heading",{"level":182},2,[184],{"text":185,"type":49},"What are R&D tax credits?",{"type":45,"content":187},[188],{"text":189,"type":49},"As in many countries, the UK government incentivises companies to seek new technological advances that will benefit everyone. It does this through a few tax schemes which let businesses claim significant money back through tax credits (and sometimes cash payments).",{"type":45,"content":191},[192,194,198],{"text":193,"type":49},"The goal is to reward companies which invest in research and development, which then lets them ",{"text":195,"type":49,"marks":196},"reinvest",[197],{"type":155},{"text":199,"type":49}," in the quarters and years that follow.",{"type":180,"attrs":201,"content":203},{"level":202},3,[204],{"text":205,"type":49},"Who can claim research & development credits?",{"type":45,"content":207},[208],{"text":209,"type":49},"There are a few relatively simple criteria to qualify for relief. You must be:",{"type":211,"content":212},"bullet_list",[213,219,225],{"type":124,"content":214},[215],{"type":45,"content":216},[217],{"text":218,"type":49},"A British business subject to Corporation Tax",{"type":124,"content":220},[221],{"type":45,"content":222},[223],{"text":224,"type":49},"Doing work that is considered research and development (more on this next)",{"type":124,"content":226},[227],{"type":45,"content":228},[229],{"text":230,"type":49},"Spending money on these activities",{"type":45,"content":232},[233,235,239,240,245,246,250,251,255],{"text":234,"type":49},"That last point is important. This is not a grant, it’s a tax credit. So to claim relief, ",{"text":236,"type":49,"marks":237},"you have to be able to",[238],{"type":132},{"text":134,"type":49},{"text":241,"type":49,"marks":242},"prove",[243,244],{"type":132},{"type":155},{"text":134,"type":49},{"text":247,"type":49,"marks":248},"that you have indeed spent money",[249],{"type":132},{"text":134,"type":49},{"text":252,"type":49,"marks":253},"specifically related to research and development",[254],{"type":132},{"text":256,"type":49},".",{"type":45,"content":258},[259],{"text":260,"type":49},"This can be a challenge for many businesses, and we’ll present a clear strategy to overcome it soon. But first...",{"type":180,"attrs":262,"content":263},{"level":182},[264],{"text":265,"type":49},"What qualifies as R&D for HMRC?",{"type":45,"content":267},[268,270,277],{"text":269,"type":49},"You can’t simply claim your work to be research-oriented and hope to receive tax relief. ",{"text":271,"type":49,"marks":272},"As HMRC itself explains",[273],{"type":274,"attrs":275},"link",{"href":276,"uuid":52,"anchor":52,"target":52,"linktype":32},"https://www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief",{"text":278,"type":49},", to get R&D relief you need to explain how a project:",{"type":211,"content":280},[281,291,301,310],{"type":124,"content":282},[283],{"type":45,"content":284},[285,289],{"text":286,"type":49,"marks":287},"Looked for an advance in science and technology",[288],{"type":132},{"text":290,"type":49},". This advance must benefit the field overall, and not just your business. And you can’t simply apply techniques or technology from another field to your own.",{"type":124,"content":292},[293],{"type":45,"content":294},[295,299],{"text":296,"type":49,"marks":297},"Had to overcome uncertainty",[298],{"type":132},{"text":300,"type":49},". If an expert in the field cannot say how a specific outcome could be achieved, this counts as uncertainty.",{"type":124,"content":302},[303],{"type":45,"content":304},[305,309],{"text":306,"type":49,"marks":307},"Tried to overcome this uncertainty",[308],{"type":132},{"text":256,"type":49},{"type":124,"content":311},[312],{"type":45,"content":313},[314,318],{"text":315,"type":49,"marks":316},"Could not be easily worked out by a professional in the field",[317],{"type":132},{"text":319,"type":49},". If the new advance just hadn’t been tackled yet but wasn’t particularly challenging, it won’t count.",{"type":45,"content":321},[322],{"text":323,"type":49},"Your project may research or develop a new process, product or service, or improve on an existing one. But the advance itself must be new and not easily overcome by someone with a little know-how.",{"type":45,"content":325},[326],{"text":327,"type":49},"When it’s time to claim your tax credit, you’ll have to argue that you meet these criteria in a written submission to HMRC.",{"type":180,"attrs":329,"content":330},{"level":182},[331],{"text":332,"type":49},"What is the R&D tax credit rate?",{"type":45,"content":334},[335],{"text":336,"type":49},"So how much tax relief can you potentially receive? There are two key types of R&D tax credit in the UK. They function essentially the same, but apply to different sized companies and offer different levels of relief.",{"type":180,"attrs":338,"content":339},{"level":202},[340],{"text":341,"type":49},"Small and medium sized enterprises (SME) R&D relief",{"type":45,"content":343},[344],{"text":345,"type":49},"This applies to companies with:",{"type":211,"content":347},[348,354],{"type":124,"content":349},[350],{"type":45,"content":351},[352],{"text":353,"type":49},"Fewer than 500 staff",{"type":124,"content":355},[356],{"type":45,"content":357},[358],{"text":359,"type":49},"Turnover under €100 million or a balance sheet under €86 million",{"type":45,"content":361},[362],{"text":363,"type":49},"This R&D relief comes with two potential advantages for SMEs, depending on their revenue:",{"type":211,"content":365},[366,372],{"type":124,"content":367},[368],{"type":45,"content":369},[370],{"text":371,"type":49},"If profitable, they can deduct a total of 186% of qualifying costs from yearly profit - the normal 100% plus an extra 86%.",{"type":124,"content":373},[374],{"type":45,"content":375},[376,378],{"text":377,"type":49},"If making a loss, they can claim a tax credit worth up to 10% of the ",{"text":379,"type":49,"marks":380},"surrenderable loss",[381],{"type":274,"attrs":382},{"href":383,"uuid":52,"anchor":52,"target":52,"linktype":32},"https://www.gov.uk/hmrc-internal-manuals/corporate-intangibles-research-and-development-manual/cird90500",{"type":45,"content":385},[386],{"text":387,"type":49},"Those are obviously quite appealing benefits for qualifying companies. And businesses above these thresholds, there’s another credit to know.",{"type":180,"attrs":389,"content":390},{"level":202},[391],{"text":392,"type":49},"Research and Development Expenditure Credit (RDEC)",{"type":45,"content":394},[395],{"text":396,"type":49},"This credit is for larger companies, and was available until 2016 under the large company scheme. It can also be claimed by small and medium enterprises under subcontract from a larger company.",{"type":45,"content":398},[399,401,405],{"text":400,"type":49},"The RDEC lets businesses claim 20% of their qualifying R&D expenses ",{"text":402,"type":49,"marks":403},"incurred after 1 April 2023",[404],{"type":155},{"text":406,"type":49},". These include:",{"type":211,"content":408},[409,434,449],{"type":124,"content":410},[411],{"type":45,"content":412},[413,417,419,433],{"text":414,"type":49,"marks":415},"Staff costs",[416],{"type":132},{"text":418,"type":49}," for those working directly on R&D projects. This includes salaries, wages, pensions, and ",{"text":420,"type":49,"marks":421},"National Insurance contributions",[422],{"type":274,"attrs":423},{"href":424,"uuid":425,"anchor":52,"target":426,"linktype":427,"story":428},"/es/blog/national-insurance","f1033aad-1a7b-4f02-a7c2-bf6e13d5d158","_self","story",{"name":429,"id":430,"uuid":425,"slug":431,"url":432,"full_slug":432,"_stopResolving":67},"National Insurance: a guide for employers",443243398,"national-insurance","blog/national-insurance",{"text":256,"type":49},{"type":124,"content":435},[436],{"type":45,"content":437},[438,442,443,447],{"text":439,"type":49,"marks":440},"Subcontractor costs",[441],{"type":132},{"text":134,"type":49},{"text":444,"type":49,"marks":445},"if",[446],{"type":155},{"text":448,"type":49}," they’re charged by a charity, a higher education institution, a scientific research body, a health service body, or an individual or partnership of individuals.",{"type":124,"content":450},[451],{"type":45,"content":452},[453,457],{"text":454,"type":49,"marks":455},"Consumables",[456],{"type":132},{"text":458,"type":49}," including materials and utilities consumed as part of the R&D project.",{"type":45,"content":460},[461],{"text":462,"type":49},"You cannot claim for:",{"type":211,"content":464},[465,481,489,497,505],{"type":124,"content":466},[467],{"type":45,"content":468},[469,473,475,479],{"text":470,"type":49,"marks":471},"Clerical or admin work",[472],{"type":132},{"text":474,"type":49}," that would have been done anyway - such as payroll. But you ",{"text":476,"type":49,"marks":477},"can",[478],{"type":155},{"text":480,"type":49}," claim staff costs for admin staff working directly on your R&D project.",{"type":124,"content":482},[483],{"type":45,"content":484},[485],{"text":486,"type":49,"marks":487},"Capital expenditure",[488],{"type":132},{"type":124,"content":490},[491],{"type":45,"content":492},[493],{"text":494,"type":49,"marks":495},"Land costs",[496],{"type":132},{"type":124,"content":498},[499],{"type":45,"content":500},[501],{"text":502,"type":49,"marks":503},"Patent and trademark costs",[504],{"type":132},{"type":124,"content":506},[507],{"type":45,"content":508},[509],{"text":510,"type":49,"marks":511},"Rent or rates",[512],{"type":132},{"type":45,"content":514},[515],{"text":516,"type":49},"So we see a relatively narrow set of costs that can be claimed. But the potential amount of relief available is still significant. Effectively saving 20% on expenses for any project is always an interesting proposition.",{"type":45},{"type":180,"attrs":519,"content":520},{"level":182},[521],{"text":522,"type":49},"How to claim the HMRC research & development tax credit",{"type":45,"content":524},[525],{"text":526,"type":49},"As with most things tax, the actual claim is entered into your CT600 - the Company Tax Return form. This will cover the R&D activity that occurred in the previous tax year.",{"type":45,"content":528},[529],{"text":530,"type":49},"If you want to claim for more than 12 months, you can submit one claim for each accounting period.",{"type":45,"content":532},[533],{"text":534,"type":49},"This all sounds simple, but tax returns are always complex. And you certainly want to make sure you get things right.",{"type":180,"attrs":536,"content":537},{"level":202},[538],{"text":539,"type":49},"What you need to show",{"type":45,"content":541},[542],{"text":543,"type":49},"As part of your claim, you need to provide a few things:",{"type":211,"content":545},[546,556,562,568],{"type":124,"content":547},[548],{"type":45,"content":549},[550,554],{"text":551,"type":49,"marks":552},"A summary of the activity and how it qualifies",[553],{"type":132},{"text":555,"type":49}," under the criteria we saw above (looked for an advance, had to overcome an uncertainty, and couldn’t have been easily worked out);",{"type":124,"content":557},[558],{"type":45,"content":559},[560],{"text":561,"type":49},"Details of the project(s);",{"type":124,"content":563},[564],{"type":45,"content":565},[566],{"text":567,"type":49},"Start and end dates of the accounting period, which should be the same as for the CT600 overall;",{"type":124,"content":569},[570],{"type":45,"content":571},[572,576],{"text":573,"type":49,"marks":574},"Details of the qualifying R&D costs",[575],{"type":132},{"text":256,"type":49},{"type":45,"content":578},[579],{"text":580,"type":49},"And that last point is where things can get interesting. For many businesses, calculating costs attributable to any project is much easier said than done.",{"type":45,"content":582},[583],{"text":584,"type":49},"As a reminder, to claim R&D tax relief you need to be able to prove that expenses were incurred. Just like claiming ordinary tax relief on expenses.",{"type":45,"content":586},[587,589,600],{"text":588,"type":49},"So you need to have a clear and efficient way to track what’s spent on the project. Unless you have a robust ",{"text":590,"type":49,"marks":591},"spend management system",[592],{"type":274,"attrs":593},{"href":594,"uuid":595,"anchor":52,"target":52,"linktype":427,"story":596},"spend-management-software","a3acaca7-80c8-4a56-b8db-3b1da7d9e324",{"name":597,"id":598,"uuid":595,"slug":594,"url":599,"full_slug":599,"_stopResolving":67},"10 top spend management software solutions",208736523,"blog/spend-management-software",{"text":601,"type":49}," in place, you end up fumbling through receipts and transactions made months ago.",{"type":180,"attrs":603,"content":604},{"level":182},[605],{"text":606,"type":49},"How proper spend management makes this process easy",{"type":45,"content":608},[609,615],{"text":610,"type":49,"marks":611},"Spend management",[612],{"type":274,"attrs":613},{"href":614,"uuid":52,"anchor":52,"target":426,"linktype":32},"https://www.spendesk.com/en/",{"text":616,"type":49}," goes beyond simple expense tracking. It offers real-time tracking of all discretionary spending, captures receipts, and gives you better analysis of company costs.",{"type":45,"content":618},[619],{"text":620,"type":49},"For R&D tax credits, you have two vital issues to worry about:",{"type":118,"attrs":622,"content":623},{"order":120,"key":121},[624,630],{"type":124,"content":625},[626],{"type":45,"content":627},[628],{"text":629,"type":49},"Correctly assigning costs to the right cost centre; and",{"type":124,"content":631},[632],{"type":45,"content":633},[634],{"text":635,"type":49},"Collecting receipts to prove that these costs were in fact incurred.",{"type":45,"content":637},[638],{"text":639,"type":49},"Here, we’re focusing mainly on the “consumables” portion of your claim. Payroll and subcontracting are relatively easy to track. You’ll already have a payroll system and will be able to see the headcount for each team or project. And subcontracting costs are often paid in large lump sums.",{"type":45,"content":641},[642],{"text":643,"type":49},"Consumables are trickier because they’re often ad hoc. And while they can be small, they quickly add up. So you certainly want to be able to track them, but you also don’t want to waste undue time on admin.",{"type":45,"content":645},[646,648,652],{"text":647,"type":49},"And you want to be able to track them as you go. ",{"text":649,"type":49,"marks":650},"Avoid having to rummage back through receipts and credit card statements",[651],{"type":132},{"text":653,"type":49}," at the end of the year. That’s critical.",{"type":45,"content":655},[656],{"text":657,"type":49},"So here are your strategies to overcome our two main challenges above.",{"type":180,"attrs":659,"content":660},{"level":202},[661],{"text":662,"type":49},"Code expenses up front",{"type":45,"content":664},[665,667,671],{"text":666,"type":49},"Good spend management solutions let you ",{"text":668,"type":49,"marks":669},"code payments at the time of purchase",[670],{"type":132},{"text":672,"type":49},". Unlike your classic company credit card statement, every transaction assigned to the right project from the beginning.",{"type":45,"content":674},[675,677,681],{"text":676,"type":49},"The benefit here is clear: at any time, your finance team can quickly see the ",{"text":678,"type":49,"marks":679},"actual amount spent",[680],{"type":155},{"text":682,"type":49}," for your R&D projects. 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