R&D Tax
R&D tax relief for owner-managed UK businesses: what actually qualifies
R&D tax relief is not only for startups and science labs. Here is what actually qualifies for owner-managed businesses, how the merged scheme works, and why a claim that stands up to HMRC matters more than ever.
If your business has spent time and money solving a genuine technical problem, whether that is building software, improving a process, or developing a product, there is a reasonable chance some of that work qualifies for R&D tax relief. The relief exists to reward that kind of problem-solving, and it applies well beyond the tech sector.
Plenty of owner-managed businesses qualify and never claim, usually because they assume R&D means people in white coats. Here is what actually counts, how the scheme works now, and what makes a claim worth having.
The short version
- R&D relief is not sector-specific. Manufacturing, engineering, food, construction and software businesses all claim.
- The work must seek a genuine advance and resolve real technical uncertainty, not just be new to you.
- Claims now run through the merged scheme, with its own rates and rules.
- HMRC scrutiny is high. Documentation is what decides whether a claim holds.
- We identify qualifying activity, build the evidence and prepare the claim, charged at 20% of the claim value.
What actually counts as R&D
Two tests matter. First, the work has to seek an advance in a field of science or technology, something that moves the state of the art forward, not just something new to your business. Second, it has to involve genuine technical uncertainty: a competent professional could not simply know the answer or look it up.
That is broader than most owners think. Signs your work might qualify include:
- Developing a product or process where you were not sure it could be done, or how.
- Building software that solved a problem off-the-shelf tools could not.
- Adapting a process to hit a performance, efficiency or environmental target that required real experimentation.
- Trial and error by skilled staff to overcome a technical hurdle.
Everyday work, applying known methods, cosmetic changes, or routine development, does not qualify, however much effort it took.
The rules have tightened
HMRC is looking at R&D claims far more closely than it used to, and rejecting the weak ones. The relief now runs through the merged scheme, which brought most claimants under one set of rules and rates, so the approach that worked a couple of years ago may not be current. The direction of travel is clear: more scrutiny, more evidence expected, less tolerance for optimistic claims.
Documentation is the deciding factor
A strong claim shows what the technical challenge was, why it was not straightforward, and which costs genuinely relate to the work. A vague claim that lumps in routine development invites an enquiry, and an enquiry can cost more time and money than the relief is worth.
The businesses that claim well keep notes as the work happens: what they were trying to achieve, where it got difficult, who worked on it and for how long. Reconstructing that a year later from memory is far weaker.
Think you might qualify?
Find out what you can actually claim
We assess whether your work qualifies, build the evidence and prepare a claim that stands up to HMRC scrutiny.
Book a 15-minute intro call →What it is worth, and how we work
Done properly, R&D relief is worth having, either as a reduction in your Corporation Tax or, for loss-making companies, a cash credit. The key is a claim that is robust rather than optimistic. We identify the qualifying activity, build the supporting evidence and prepare the claim, charged at 20% of the claim value, with fixed-fee options for larger or simpler claims. See our R&D tax support.
Frequently asked questions
What counts as R&D for tax purposes?
Work that seeks a genuine advance in science or technology and resolves real technical uncertainty, where the answer was not readily available to a competent professional. It is about the nature of the problem, not the industry.
Does my business qualify if we are not a tech company?
Possibly. Manufacturing, engineering, food production, construction and many other sectors carry out qualifying work. What matters is whether you were solving a genuine technical problem, not what label your industry has.
How much is R&D relief worth?
It depends on your qualifying spend and whether you are profit or loss making, delivered either as a Corporation Tax reduction or a cash credit. We charge 20% of the claim value, with fixed-fee options for larger or simpler claims.
What is the merged scheme?
It is the current framework that brought most R&D claimants under one set of rules and rates, replacing the older separate SME and RDEC routes for most businesses. It changes how claims are calculated, so up-to-date advice matters.
Do I need a specialist to claim?
Given the level of HMRC scrutiny, yes. A claim needs a clear technical narrative and accurate costs to hold up. Getting it prepared or reviewed by someone who does this properly protects both the relief and you.
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Last updated: July 2026. General guidance for UK limited companies, not specific advice. R&D rules and rates change, so check the current position. For support scoped to your business, book a free intro call.
