UK R&D Tax Credits: Who Qualifies and How to Claim in 2026
The UK's merged R&D scheme changes the rules for SMEs. Here's what qualifies, what HMRC now scrutinises, and how to make a defensible claim.
8 min read · 26 January 2026
The merged scheme in plain English
For accounting periods starting on or after 1 April 2024, most companies claim under the merged R&D expenditure credit (RDEC) scheme at 20% (an effective net benefit of around 15%). A separate enhanced regime remains for R&D-intensive loss-making SMEs.
The old SME scheme's headline rates are gone. Companies used to double-dipping on relief need to model the new cash outcome carefully.
What actually qualifies as R&D
HMRC applies the DSIT guidelines: the project must seek an advance in science or technology by resolving scientific or technological uncertainty that a competent professional could not readily deduce.
Software work often qualifies — but not because it is 'novel to your business'. It must advance the field, not just the company.
What HMRC now scrutinises
Enquiry rates have risen sharply. HMRC focuses on subcontractor treatment, overseas expenditure (mostly no longer eligible), qualifying indirect activities, and the competent professional's technical narrative.
A claim without a well-written technical report and a clean cost apportionment is far more likely to be opened.