Can I claim again next year for R&D tax credits?

You can claim for qualifying R&D expenditure relating to the relevant accounting period, but the same expenditure cannot be claimed twice. It is common for R&D projects to span more than one accounting period, particularly where resolving scientific or technological uncertainty requires ongoing research, testing and development.

Businesses should maintain technical records that reflect the:

• Point where your R&D project stood at the start of the accounting period.
• Scientific or technological advance being sought.
• Scientific or technological uncertainties encountered.
• Qualifying R&D activity that was carried out
• Progress that was made throughout the accounting period.

For accounting periods beginning on or after 1 April 2024, companies may be able to claim under the merged R&D expenditure credit scheme or, where the relevant conditions are met, Enhanced R&D Intensive Support (ERIS). ERIS is available to qualifying loss-making R&D-intensive SMEs.

Eligible R&D activity can include work that directly contributes to achieving an advance in science or technology through the resolution of scientific or technological uncertainty. Certain qualifying indirect activities may also be included where the relevant conditions are met.

Commercial, aesthetic and routine business administration activities do not qualify simply because they form part of a wider R&D project. Routine production of goods or delivery of services will also generally fall outside qualifying R&D where it does not contribute to resolving the relevant scientific or technological uncertainty.

Where an R&D project spans multiple accounting periods, each claim should reflect the qualifying activity and expenditure relevant to that particular period. This means businesses should be able to show how the project developed from one accounting period to the next and identify when qualifying R&D activity began and ended.

Companies making an R&D claim must also submit an Additional Information Form to HMRC. A separate form is required for each accounting period being claimed for, and it must contain information relevant to that accounting period. The form must be submitted before, or on the same day as, the Company Tax Return containing the R&D tax credit claim.

Some businesses must also submit a Claim Notification Form. This requirement can apply to first-time claimants and businesses that have not made a relevant R&D claim within HMRC’s specified timeframe, although exceptions apply. Where required, the notification must normally be made no later than six months after the end of the relevant period of account.

Keeping clear financial and technical records throughout a project can help establish which activities and expenditure relate to qualifying R&D. It can also help distinguish qualifying work from routine commercial or business development activity when preparing the information required to support a claim.