R&D tax relief for startups

R&D tax relief, on a fixed fee — never a slice of your claim.

We work out honestly whether your project qualifies, build the claim on the evidence, file it with the paperwork HMRC now demands, and defend it if they ask questions. The price is agreed in writing before we start.

Talk to us about a claim Do I qualify?

The short answer

We prepare and file UK R&D tax relief claims for startups under the merged R&D expenditure credit and Enhanced R&D Intensive Support, for a fixed fee agreed before work starts rather than a percentage of the credit. That includes deciding what genuinely qualifies, costing it, writing the technical narrative, submitting the claim notification and additional information form on time, and handling any HMRC enquiry.

R&D relief has spent five years being sold badly. Cold callers told cafés their loyalty cards qualified, claim factories took a quarter of the money for a template narrative, and HMRC responded exactly as you would expect. It now runs a compliance operation of over 500 people, up from around 100 in 2020-21, and in 2023-24 it opened checks on 17% of claims — of which 77% ended in an adjustment (HMRC, approach to R&D tax reliefs 2023 to 2024).

The market reacted by retreating. Claims fell 26% to 46,950 in 2023-24, and first-time claimants dropped 45% — the fourth consecutive annual fall (HMRC R&D tax credits statistics, September 2025). Some of that is abuse leaving the system. A good deal of it is founders with genuinely qualifying work deciding the whole thing looks too much like trouble.

Both reactions are wrong, and they have the same cause: the work was being priced as a commission on a windfall rather than as a piece of professional judgement. So we price it as a piece of professional judgement.

The honest test

Does your work actually qualify?

A project qualifies if it sought an advance in science or technology by resolving scientific or technological uncertainty — uncertainty that a competent professional working in that field could not readily deduce their way out of. Two consequences catch founders out, and they catch them out every single time.

The advance has to be an advance in the field, not an advance for your company. Solving something your team had never met before, which any senior engineer in that discipline could have sketched on a napkin, is not an advance. And commercial novelty is irrelevant: “the first booking platform for climbing gyms” is a business idea, not a technological one. HMRC is asking a technical question.

The tell is a question for your technical lead rather than your accountant. On this project, was there a point where nobody knew whether it could be done at all, and you had to run experiments to find out? If yes, and somebody wrote down what was tried and what failed, you have a claim. If the answer is that it was a lot of hard work, you do not, and no amount of narrative writing will turn it into one.

Usually qualifies

Algorithms with no published solution. Making a system perform at a scale where the standard architecture demonstrably falls over. Integrations that genuinely required experiment, failure and redesign. Machine learning work where it was unknown at the outset whether the approach would function at all.

Usually does not

Standard web and mobile apps built on mature frameworks. Interface design and styling. Configuring off-the-shelf software. API integrations that worked as documented. Data migration. Testing and bug-fixing that was hard rather than uncertain.

The bit people forget

Qualifying costs are mostly people — the share of salary, employer NI and pension that went into the R&D. Then externally provided workers and subcontractors at restricted rates, consumables genuinely used up, software licences, and cloud and data costs. Rent, marketing and time spent fundraising do not qualify.

What a claim is worth

Two routes, two very different numbers

The merged R&D expenditure credit is 20% of qualifying expenditure, and the credit is itself taxable — so a company paying the 25% main rate nets about 15p per £1 of qualifying spend, and a company on the small profits rate or loss-making nets about 16.2p.

Enhanced R&D Intensive Support is the loss-making route, and it is worth substantially more. If your company is loss-making and qualifying R&D is at least 30% of total expenditure, you deduct an extra 86% of qualifying costs, surrender the loss and take a payable credit at 14.5% — about 26.97p per £1. There is also a year of grace: a company that met the intensity test in one period can still use ERIS in the next even if it narrowly fails (HMRC guidance on the merged scheme and ERIS).

On £180,000 of qualifying spend that is the difference between roughly £29,000 and roughly £48,500 of cash — decided entirely by which route the company claims under, and by an intensity calculation that has to be done before anything is filed. Connected companies are aggregated for that ratio, which is why group-structured startups get it wrong.

Then the cap. Both routes limit the payable credit to £20,000 plus 300% of your PAYE and National Insurance liabilities for the period. It bites hardest on exactly the startups that need the cash — the ones whose engineers invoice through their own companies, or whose founders take dividends rather than salary. Under ERIS a claim that exceeds the cap is invalid rather than merely restricted. How you pay yourself is not a neutral decision here, and our guide to paying yourself as a founder covers the trade-off from the other side.

The two deadlines

Neither has anything to do with whether you qualify

1
Claim notification — six months after the end of your period of account
If this is your first claim, or you have not claimed in the previous three years, you must notify HMRC. The window opens on the first day of the period of account and closes six months after it ends, so a year ended 31 March must notify by 30 September. Miss it and the year is gone, however strong the science was and however early you file the return (HMRC claim notification guidance).
2
Additional information form — before, or on the same day as, the CT600
Mandatory for every claim. Send the tax return first and HMRC writes to say it has removed the R&D claim from it. The form carries your project descriptions, your cost breakdown and the named company officer responsible for its accuracy (HMRC additional information requirements).
3
Advance assurance, if it fits
HMRC now runs a targeted advance assurance service covering specific areas of a claim, alongside the older full-claim service for genuine first-timers under £2m turnover. It is not right for everyone and a refusal cannot be appealed, so we will tell you honestly whether your claim is a candidate.
4
Then the claim itself
Costed, written and filed with the return, with the technical narrative built from what your engineers actually did rather than from a template with your company name dropped into it.

How we work

What the fixed fee covers

A straight answer on whether the work qualifies, before you commit to anything
The intensity calculation that decides whether you are on the merged scheme or ERIS — done first, not afterwards
The PAYE and NIC cap modelled before the credit goes anywhere near your cashflow forecast
Costs built from your payroll and ledger rather than an estimate
The technical narrative written with your engineers, in their language
Claim notification and the additional information form filed on time and in the right order
Any HMRC enquiry handled, included

The fee is agreed in writing before we start, and it does not move because the claim turned out bigger than expected.

Talk to us about a claim Read the full R&D guide

R&D questions founders ask

Straight answers

How much do you charge for an R&D claim?

A fixed fee, agreed in writing before we start any work, based on the size and complexity of the claim rather than a share of what comes back. We do not charge a percentage of your credit. You will know the number before we begin, and it does not move because the claim turned out to be larger than expected.

Why does a percentage fee matter?

Because it pays your adviser more for a bigger claim, at a moment when HMRC is checking a large share of claims and most checks end in an adjustment. That is the wrong incentive to have sitting on the other side of the table. A fixed fee means the advice you get about what qualifies is the same advice whether the answer is generous or disappointing.

Does my startup actually qualify?

The test is whether a project sought an advance in science or technology by resolving uncertainty that a competent professional in the field could not readily deduce their way out of. It has to be an advance in the field, not just new to your team, and commercial novelty counts for nothing. Building a standard web app with mature frameworks does not qualify. Getting a system to work at a scale where the usual architecture demonstrably fails often does. We give you a straight answer on this before anyone starts writing.

What is the deadline I might already have missed?

If this is your first claim, or you have not claimed in the previous three years, you must send HMRC a claim notification within six months of the end of your period of account. Founders assume they have the two-year window for amending a return. They do not — the notification window shuts eighteen months earlier, and missing it makes the claim invalid with no way back. Talk to us before your year end, not after it.

What happens if HMRC opens an enquiry?

We handle it, and it is included in the fixed fee. That is the point of pricing the job properly at the start: an adviser who has taken a percentage and moved on has no stake in defending the claim eighteen months later. We only put work in a claim we are prepared to argue for.

Can I claim if the work was grant funded?

Yes. Under the merged scheme the old subsidised-expenditure restriction is gone, so grant funding no longer cuts your claim down the way it used to. This matters a great deal to Innovate UK and other grant-backed companies, and it is one of the more common reasons a founder has been told, wrongly, that there is nothing here for them.

Can I claim for developers based overseas?

Usually not any more. For accounting periods beginning on or after 1 April 2024, payments for R&D carried out overseas are excluded unless the conditions genuinely could not be replicated in the UK — and HMRC expressly disregards cost and the availability of workers as reasons. “We could not afford UK developers” and “we could not find UK developers” are both explicitly not good enough. We will tell you where your team actually leaves you before you build the claim around it.