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Introduction
R&D tax relief remains one of the UK's most valuable tax incentives for innovative businesses. However, recent reforms have changed how the relief is accessed, calculated and claimed. Understanding these changes is essential to ensure compliance and maximise benefits.
What has changed?
Recent reforms have focused on:
- Simplifying the system structure
- Reducing abuse of claims
- Adjusting rates and thresholds
- Increasing scrutiny on eligible expenditure
Who can claim?
R&D relief is available to companies that:
- Seek to achieve technological or scientific advancement
- Encounter technical uncertainty
- Undertake qualifying development work
This applies across many sectors, not just traditional science or technology.
Common misconceptions
- "Only tech companies qualify" — incorrect
- "Routine improvements qualify" — usually not
- "Outsourced work always qualifies" — depends on structure
Key risks under the new regime
- Incorrect classification of expenditure
- Insufficient technical documentation
- Poorly supported claims
- Use of non-qualifying costs
HMRC scrutiny has increased significantly.
How to strengthen claims
Businesses should ensure:
- Clear technical narratives
- Detailed cost breakdowns
- Strong internal documentation
- Proper review before submission
How LMJ Group supports clients
We assist with:
- R&D claim preparation
- Compliance with HMRC requirements
- Identifying qualifying expenditure
- Structuring robust supporting evidence
Conclusion
R&D tax relief remains valuable, but the regulatory environment has become more stringent. Proper structuring and documentation are now essential to ensure successful claims.