R&D tax relief has a branding problem: half of founders assume it's only for people in lab coats, and the other half were told by a cold-caller that their café's new loyalty card qualifies. Both are wrong, and the second group is why HMRC now checks claims hard.

The actual test

Your project qualifies if it attempts an advance in science or technology by resolving scientific or technological uncertainty — meaning a competent professional in the field couldn't readily deduce the solution. In practice, for software startups:

  • Likely qualifies: building genuinely novel algorithms, solving scaling problems without an established pattern, integrating systems in ways that required real experimentation to make work.
  • Doesn't qualify: building a standard app with known tools, styling, routine API integrations, or work that was merely commercially novel ("first meal-kit service for climbers") rather than technologically novel.

An honest tell: did your technical lead face problems where the answer wasn't findable — where they had to experiment, fail and iterate? That struggle, documented, is the claim.

What it's worth

Under the merged scheme, relief lands around 15–16p per £1 of qualifying spend for most companies, with a more generous rate (up to ~27p) for loss-making, R&D-intensive startups — where qualifying R&D is at least 30% of total expenditure. Qualifying costs include staff time (the big one), subcontractors at restricted rates, software, cloud computing and data costs.

Doing it properly

  • Claims need an Additional Information Form with named projects and a technical narrative — boilerplate gets flagged.
  • First-time claimants generally must notify HMRC within 6 months of the year-end they intend to claim for. Miss it, lose the year.
  • Track engineer time against R&D projects as you go — reconstructing it a year later shrinks and weakens claims.
  • Avoid "no-win-no-fee, everyone qualifies!" boutiques. HMRC's compliance teams know their templates, and you carry the penalty, not them.

We assess qualifying work honestly (including telling you when it doesn't), build the narrative with your tech lead, and file the claim as part of your corporation tax return. If you're spending real money on hard technical problems, ask us — it may be the cheapest funding you'll ever get, as covered in our funding guide.