R&D Tax Relief in Greater London

Is your based limited company investing in innovation? Whether you’re a software developer, manufacturer, engineer, or any UK limited company carrying out qualifying R&D activity, you may be entitled to reduce your corporation tax bill or receive a cash credit from HMRC. Our specialist advisers help businesses in and across Greater London prepare and submit compliant R&D tax relief claims under the current Merged RDEC scheme and Enhanced R&D Intensive Support (ERIS).

• Free eligibility review, no upfront cost
• Technical narrative and AIF preparation included
• Compliant with 2024/25 HMRC R&D reforms

What Is R&D Tax Relief and How Does It Apply to Businesses in ?

R&D tax relief is a UK government incentive administered by HMRC that allows limited companies to recover a portion of the costs incurred while resolving scientific or technological uncertainty. For businesses in , this means that qualifying innovation work whether you’re developing bespoke software, improving a manufacturing process, or engineering a novel product can be partially offset through either a reduction in your corporation tax liability or a payable cash credit.

Since April 2024, most UK companies now claim under the unified Merged RDEC (Research and Development Expenditure Credit) scheme at a 20% above-the-line credit rate. Loss making companies with R&D intensive expenditure (40% or more of total outgoings) may qualify for the Enhanced R&D Intensive Support (ERIS) scheme at a higher benefit rate.

The practical benefit to a business depends on:

• Whether your work resolves a genuine scientific or technological uncertainty
• The quantum of qualifying costs (staff, EPWs, software, consumables, subcontractors)
• Whether you’re profit-making, loss-making, or R&D intensive under ERIS
• Your company’s accounting period and whether HMRC notification deadlines have been met

Sectors active in Greater London that regularly generate eligible R&D claims include:

Software and Technology Development work involving novel algorithms, integration of complex systems, overcoming performance or scalability constraints, or addressing security challenges not solvable through routine application of existing methods can all qualify.

Manufacturing and Engineering Process optimisation, prototyping new materials or products, and addressing site specific engineering challenges requiring trial-and-error testing regularly generate substantial qualifying costs under the Merged RDEC scheme.

Construction and Infrastructure Projects that involve developing innovative methods for carbon reduction, unusual structural challenges, or prefabricated system design for non-standard environments may qualify provided the uncertainty cannot be resolved by straightforward application of standard practice.

Not sure whether your business qualifies? Contact us for a free, no-obligation eligibility review

What Costs Can a Business Include in an R&D Tax Claim?

The scope of qualifying costs changed significantly under the 2023/24 HMRC reforms. Businesses in preparing claims for accounting periods starting on or after 1 April 2024 should ensure their advisers understand the current qualifying cost categories:

Qualifying staff costs Salaries, employer National Insurance contributions, and employer pension contributions for employees directly engaged in qualifying R&D activity, including supervisory and support staff, are the most significant cost category for most claimants.

Externally Provided Workers (EPWs) Staff supplied through agencies and engaged directly on qualifying R&D work can be included at 65% of their cost (subject to HMRC’s EPW rules).

Software licences Licences for software used directly and necessarily in the qualifying R&D process are includable. Cloud computing costs and data licence fees are now also eligible under the post-2023 rules.

Subcontractor costs Payments to subcontractors for work on qualifying R&D are eligible at 65% under the Merged RDEC scheme, subject to the restriction on overseas subcontractor costs introduced in April 2024.

Consumable items Materials and consumables directly used and consumed during prototyping, testing, or experimentation phases are claimable.

Pure mathematics Theoretical mathematical work that constitutes a genuine advance in that field is now eligible following the 2023 legislative changes.

How Does HMRC’s Mandatory Additional Information Form Affect Claims?

Since August 2023, all R&D tax relief claims in the UK including those submitted by businesses must be accompanied by a completed Additional Information Form (AIF). This is submitted separately via the HMRC online portal before the company tax return is filed. A claim submitted without a corresponding AIF will be rejected.

The AIF requires:

• A technical description of each qualifying project
• The scientific or technological uncertainty the project sought to resolve
• How the company sought to overcome that uncertainty (the competent professional test)
• The relevant qualifying cost breakdown

For businesses, getting the technical narrative right is the highest-risk element of the process. HMRC uses the AIF to risk-profile claims for enquiry. Vague or generic technical descriptions even for genuinely eligible work significantly increase the probability of an HMRC compliance check.

What Is the Notification Requirement for New R&D Claimants in Greater London?

If your company is claiming R&D tax relief for the first time or has not claimed in the previous three accounting periods HMRC requires you to submit a Claim Notification Form before the claim is made. This notification must be submitted within six months of the end of the accounting period to which the claim relates.

Missing this notification deadline permanently invalidates the claim for that period. There is no appeal mechanism and no late-filing concession. For businesses with accounting periods ending in the second half of the calendar year, this deadline can easily be missed without specialist guidance.

Our advisers proactively manage notification deadlines for all clients in Greater London to prevent inadvertent claim invalidation.

How the R&D Tax Claim Process Works for Businesses

1. Free Eligibility Review We assess your company’s qualifying activity and likely expenditure at no cost. We’ll tell you honestly whether a claim is viable and what the likely benefit range is.
2. Project and Cost Scoping We work with your technical and finance teams to identify qualifying projects, define the relevant periods of uncertainty, and map costs to the correct qualifying categories under the current scheme.
3. Technical Narrative and AIF Preparation Our advisers prepare the technical project descriptions required for the Additional Information Form, ensuring alignment with HMRC’s competent professional standard and DSIT guidance.
4. Corporation Tax Return Integration The claim is calculated and submitted as part of your company tax return. We manage the AIF portal submission separately and confirm HMRC receipt.
5. HMRC Liaison If HMRC raises queries, we manage correspondence on your behalf and provide supporting evidence. We do not withdraw claims or capitulate to HMRC pressure where the claim is legitimate.

How Much Could an R&D Tax Claim Be Worth to a Business?

The value of an R&D tax credit claim depends on your company’s tax profile and the quantum of qualifying expenditure. Under the current Merged RDEC scheme:

• Profit-making companies receive a 20% above-the-line credit on qualifying costs, which reduces their corporation tax liability. After tax, the net benefit is approximately 15p for every £1 of qualifying expenditure.
• Loss-making companies can surrender the credit for a payable cash repayment from HMRC, subject to a PAYE/NIC cap and the relevant scheme rules.
• R&D-intensive loss-making companies qualifying for ERIS receive an enhanced effective benefit rate, providing proportionally greater cash support for qualifying innovation spend.

Start Your R&D Tax Relief Claim in

If your business has undertaken qualifying technical or scientific development work in the last two accounting periods, you may be able to recover a significant portion of those costs through HMRC’s R&D tax relief scheme.

Contact our advisers today for a free, confidential eligibility review. We serve businesses across and the wider Greater London region.

Request a Free Eligibility Review