R and D reliefs

R and D reliefs

FORTHCOMING CHANGE: consultation on R&D tax reliefs advance clearances: as trailed in the government's Corporate Tax Roadmap of October 2024, at Spring Statement 2025 on 26 March 2025 HMRC launched a consultation (with a closing date of 26 May 2025) to discuss widening the use of advance clearances in R&D reliefs. The aims are to reduce error and fraud, provide certainty to businesses and improve the customer experience. For more information, see News Analysis: Spring Statement 2025—Tax analysis.

Companies may be entitled to corporation tax relief in respect of qualifying expenditure that they incur on research and development (R&D). At Spring Budget 2021, a review of the R&D tax reliefs was launched, which concluded with the announcement at Autumn Statement 2023 of a merged R&D relief scheme. The review generated a period of change and transition for these reliefs.

For accounting periods beginning before 1 April 2024, the conditions that must be met, and the value and form of the R&D tax relief available, depend very significantly on whether a company is a small or medium-sized enterprise (an SME), or a large company, for these purposes.

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