R&D Tax Relief Claims for Software and Tech Companies

R&D tax relief claims for UK software and technology companies.

For accounting periods beginning on or after 1 April 2024, there is one <a href="https://www.gov.uk/guidance/corporation-tax-research-and-development-tax-relief-for-large-companies">R&D expenditure credit at 20%</a>: above the line, taxable, and replacing the previous SME super-deduction and separate RDEC. Loss-making SMEs that spend at least 30% of total expenditure on R&D retain access to the <a href="https://www.gov.uk/guidance/corporation-tax-research-and-development-tax-relief-for-small-and-medium-sized-enterprises">Enhanced R&D Intensive Support scheme</a>, with an 86% additional deduction and a 14.5% payable credit. Both routes now require a <a href="https://www.gov.uk/guidance/submit-detailed-information-before-you-claim-research-and-development-rd-tax-relief">detailed Additional Information Form</a> before the CT600, and first-time claimants must <a href="https://www.gov.uk/guidance/tell-hmrc-that-youre-planning-to-claim-research-and-development-rd-tax-relief">notify HMRC within 6 months</a> of the accounting period end. The honesty moat on this page is the eligibility test: <a href="https://www.gov.uk/hmrc-internal-manuals/corporate-intangibles-research-and-development-manual/cird100000">qualifying R&D must seek a genuine advance in science or technology</a>. Routine software development, applying existing techniques, and re-implementing known systems do not qualify, and over-claiming invites HMRC compliance checks that can unwind prior years.

The challenges clients face.

Missing the claim notification window invalidates the claim for that period

For accounting periods starting on or after 1 April 2023, companies claiming R&D relief for the first time, or after a gap of more than three years, must <a href="https://www.gov.uk/guidance/tell-hmrc-that-youre-planning-to-claim-research-and-development-rd-tax-relief">notify HMRC within 6 months of the end of the accounting period</a>. The notification must be in place before the CT600 claim is filed. Miss the window and the claim is unavailable for that period, regardless of how strong the underlying qualifying activity is.

A missing or thin Additional Information Form causes HMRC to remove the claim

Every R&D claim must be supported by a <a href="https://www.gov.uk/guidance/submit-detailed-information-before-you-claim-research-and-development-rd-tax-relief">detailed Additional Information Form</a> submitted to HMRC before or at the same time as the CT600. The AIF requires a technical narrative explaining the advance sought and the uncertainties resolved for each project, plus a financial breakdown. Claims filed without a valid AIF are removed by HMRC. A brief description is not sufficient.

Over-claiming routine development attracts compliance checks

<a href="https://www.gov.uk/hmrc-internal-manuals/corporate-intangibles-research-and-development-manual/cird100000">Qualifying R&D must seek an advance in science or technology</a> and resolve scientific or technological uncertainty that a competent professional in the field could not easily resolve. Routine software development, applying known frameworks, integrating existing APIs, and re-implementing established techniques do not qualify. Including them broadens the claim, invites a compliance check, and can unwind legitimate qualifying work in prior years.

Getting the route wrong means the wrong credit rate and cash outcome

The <a href="https://www.gov.uk/guidance/corporation-tax-research-and-development-tax-relief-for-large-companies">merged scheme</a> applies to profitable companies and those that are loss-making but below the 30% R&D-intensity threshold. The <a href="https://www.gov.uk/guidance/corporation-tax-research-and-development-tax-relief-for-small-and-medium-sized-enterprises">ERIS route</a> applies to qualifying loss-making SMEs with R&D spend of at least 30% of total expenditure, and carries materially different rates (86% additional deduction, 14.5% payable credit). Applying the merged-scheme rate to an ERIS-eligible company under-recovers the benefit.

How we help.

Honest eligibility assessment scoped to software and technology projects

We review each project against the <a href="https://www.gov.uk/hmrc-internal-manuals/corporate-intangibles-research-and-development-manual/cird100000">advance-in-science-or-technology test</a> and include only those that resolve genuine technological uncertainty. We tell you which projects qualify and which do not, including why, so the claim is defensible and the AIF technical narrative reflects what actually happened. We do not claim the maximum; we claim the correct amount.

Full compliance path: notification, AIF preparation and CT600 filing

We handle the <a href="https://www.gov.uk/guidance/tell-hmrc-that-youre-planning-to-claim-research-and-development-rd-tax-relief">6-month claim notification</a> for first-time claimants, prepare the <a href="https://www.gov.uk/guidance/submit-detailed-information-before-you-claim-research-and-development-rd-tax-relief">Additional Information Form</a> technical narrative for each qualifying project, and incorporate the credit into the Corporation Tax computation. Where the company is a small first-time claimant, we can also apply for <a href="https://www.gov.uk/guidance/research-and-development-tax-relief-advance-assurance">R&D advance assurance</a> as a trust-building step, though we do not treat advance assurance as a blanket recommendation.

Correct route determination and legitimate credit maximisation

We determine whether your company sits on the <a href="https://www.gov.uk/guidance/corporation-tax-research-and-development-tax-relief-for-large-companies">merged scheme</a> or the <a href="https://www.gov.uk/guidance/corporation-tax-research-and-development-tax-relief-for-small-and-medium-sized-enterprises">ERIS route</a>, identify all qualifying cost categories including staff costs, subcontractor costs at the 65% cap, and eligible cloud computing spend, and maximise the legitimate credit. We handle HMRC compliance queries and correspondence where HMRC opens a check. For contractors working inside or outside off-payroll rules, we note the IR35 boundary in one line and defer all contractor-side depth to the sibling <a href="https://www.gov.uk/guidance/understanding-off-payroll-working-ir35">Contractor Tax Accountants site</a>.

Common questions

Does my SaaS or software project actually qualify for R&D relief?

It depends on whether the project seeks a genuine advance in science or technology and resolves uncertainty that a competent professional could not easily overcome. <a href="https://www.gov.uk/hmrc-internal-manuals/corporate-intangibles-research-and-development-manual/cird100000">HMRC's guidance</a> is clear that routine development, re-implementing known techniques, and applying existing frameworks do not qualify. A software project building a novel algorithm, solving a genuinely uncertain technical problem at the infrastructure layer, or advancing the state of the art in a domain can qualify. We assess each project honestly rather than assuming software development automatically qualifies.

What is the difference between the merged scheme and ERIS, and which applies to my company?

For accounting periods starting on or after 1 April 2024, the <a href="https://www.gov.uk/guidance/corporation-tax-research-and-development-tax-relief-for-large-companies">merged scheme</a> provides a 20% above-the-line taxable expenditure credit and applies to most companies. The <a href="https://www.gov.uk/guidance/corporation-tax-research-and-development-tax-relief-for-small-and-medium-sized-enterprises">Enhanced R&D Intensive Support scheme</a> applies to loss-making SMEs whose qualifying R&D spend is at least 30% of their total expenditure, and provides an 86% additional deduction plus a 14.5% payable credit. Whether your company is ERIS-eligible depends on the R&D-intensity test measured against your total expenditure for the period.

What happens if we miss the claim notification deadline?

<a href="https://www.gov.uk/guidance/tell-hmrc-that-youre-planning-to-claim-research-and-development-rd-tax-relief">HMRC's notification requirement</a> applies to first-time claimants and those who have not claimed in the prior three years. Miss the 6-month window after the accounting period end and the claim is unavailable for that period. The notification itself is separate from the AIF and the CT600; all three steps must happen in the right order.

Do we need the Additional Information Form even for a small claim?

Yes. The <a href="https://www.gov.uk/guidance/submit-detailed-information-before-you-claim-research-and-development-rd-tax-relief">Additional Information Form is mandatory</a> for all R&D claims regardless of size. It must be submitted before or at the same time as the CT600 R&D claim. Claims filed without a valid AIF are removed by HMRC. The form requires a project-level technical narrative and a qualifying-cost breakdown, which means it requires genuine preparation rather than a brief description.