How to make a successful R&D claim

Research and development (R&D) tax credits are a valuable incentive for companies engaged in innovative projects. They can significantly reduce your tax bill or provide a cash repayment, encouraging innovation and growth.

Making a successful R&D claim involves an understanding of what qualifies as R&D, thorough documentation of activities and expenditures, preparation of a compelling technical narrative, and adherence to regulations and deadlines. While the process may seem daunting, the potential benefits for your business are significant.

This blog will guide you through the essential steps to prepare and submit a successful R&D tax credit claim.

What qualifies as R&D?

Firstly, it’s important to understand what HMRC considers R&D. Your project must seek to advance in science or technology by trying to answer a scientific or technological uncertainty.

This doesn’t mean you have to work in a lab to claim R&D tax credits; many sectors including software development, engineering, and manufacturing often carry out qualifying R&D projects. Reviewing HMRC’s guidelines can provide clarity on whether your project qualifies.

Document your R&D activities

A detailed documentation process is essential, especially with HMRC now requiring companies to submit an additional information form alongside their claims. Keep records of all your company’s R&D activities, including project plans, design documents and testing results.

This documentation not only supports your claim but also helps in specifying the technological advancements attempted or achieved. It’s not enough to state that R&D took place; you must demonstrate how your activities aided you in your efforts to overcome a specific scientific or technological uncertainty.

Quantify your R&D expenditure

Identifying and quantifying eligible R&D expenditure is another critical aspect. You can claim for a variety of costs associated with R&D activities, including:

  • staff costs
  • subcontractor fees
  • consumable items
  • some types of software.

Ensure that you only include expenses directly or indirectly related to R&D activities and that you can substantiate these costs with clear, organised records. ‘Routine’ costs will not qualify as R&D expenditure.

Build a technical narrative

A compelling technical narrative is a cornerstone of a successful R&D claim.

This narrative should clearly explain the nature of the scientific or technological uncertainties you aimed to address and the work undertaken to overcome these uncertainties.

It’s important to link your R&D activities directly to the advancements you were aiming for, ensuring that the narrative is understandable to someone not an expert in your field.

Use relevant schemes

The right R&D scheme to use will depend on various factors.

Suppose you are claiming for accounting periods beginning before 1 April 2024. In that case, depending on your company’s size, you may be eligible for either the SME R&D relief or the research and development expenditure credit (RDEC) scheme. Each scheme has its own set of criteria, rules and rates.

However, the Government is merging the two separate R&D schemes into one for accounting periods starting on or after 1 April 2024. While this represents a significant change in the tax regime, there is still little guidance on how this new scheme will work.

To understand which scheme you need to use, how it works and how to make the most of your claim, we’d recommend speaking to a professional tax adviser.

Follow guidelines

HMRC regularly updates its guidelines and legislation surrounding R&D claims. Ensure your claim complies with the latest requirements, such as the additional information form, reducing the likelihood of queries or rejections.

However, the rules can be complex. Seeking advice from R&D and corporation tax experts can keep you informed and on the right side of the tax authority.


Timing is also crucial. R&D claims must be submitted within two years of the end of the accounting period in which the costs were incurred. Planning your submission within this timeframe ensures that you don’t miss out on potential tax relief.

Seek professional advice

Seeking professional advice can significantly enhance the success of your claim. As business tax planning professionals, Pearson May can provide expert insights, ensuring that your claim is robust, compliant, and maximises your tax credit entitlement. We can assist in preparing the R&D report, identifying qualifying expenditures, and navigating complex HMRC guidelines.

We specialise in guiding businesses through the R&D tax credit claim process. With our team managing your R&D claims, you can focus on driving your business forward with innovation.

Contact us today for R&D tax credit support.

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