{"id":18388,"date":"2026-06-02T14:41:19","date_gmt":"2026-06-02T09:11:19","guid":{"rendered":"https:\/\/befreeltd.com\/uk\/?p=18388"},"modified":"2026-06-02T14:45:56","modified_gmt":"2026-06-02T09:15:56","slug":"rd-tax-credits","status":"publish","type":"post","link":"https:\/\/befreeltd.com\/uk\/resources\/blogs\/rd-tax-credits\/","title":{"rendered":"Why R&D Tax Credit Claims Are More Demanding for UK Practices"},"content":{"rendered":"\t\t
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Here is the reality for UK accounting practices right now: R&D tax credits remain one of the most valuable reliefs available to innovative businesses \u2014 but preparing a compliant, well-evidenced claim in 2025 and 2026 demands considerably more from your team than it did even two years ago.<\/p>

New scheme rules. Mandatory documentation requirements. A significant uptick in HMRC compliance activity. And most recently, a brand-new Targeted Advance Assurance pilot launched by HMRC in May 2026 that changes how first-time claimants can engage with the process.<\/p>

For practices managing multiple R&D clients, the cumulative operational pressure is real \u2014 and it is not easing. This BLOG post sets out exactly where the demands are coming from and what forward-thinking firms are doing about it.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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The Shift Towards Greater R&D Claim Compliance\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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One of the most significant changes affecting UK practices is HMRC’s sharper focus on claim quality and accuracy \u2014 and it has translated directly into more work at the practice level.<\/p>

Recent reforms have introduced mandatory Additional Information Forms (AIFs), enhanced technical disclosures, and stricter claim validation processes. These measures are designed to improve the integrity of the R&D tax relief scheme \u2014 and they are working. According to HMRC’s September 2025 statistics release, the total number of R&D claims fell by 26%<\/a> in the 2023\u201324 tax year, reflecting the impact of tighter compliance requirements on claim volumes.<\/p>

But here is the nuance: fewer claims do not mean less work. For the claims that remain, the preparation process has become significantly more involved.<\/p>

Accounting teams can no longer rely solely on financial records. Every R&D tax credit claim now requires detailed project narratives, technical explanations of the scientific or technological uncertainty being addressed, staff activity records, and supporting cost calculations \u2014 all submitted via the mandatory AIF before HMRC will process the claim.<\/p>

This has fundamentally changed the nature of R&D work inside accounting practices.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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What the Merged Scheme Changed \u2014 And Why It Matters to Your Workload\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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For accounting periods starting on or after 1 April 2024, the former SME and RDEC schemes were replaced by a single Merged Scheme. On paper, consolidating two schemes into one sounds like simplification. In practice, it has introduced new complexity that affects how claims are prepared on every engagement.<\/p>

Three areas in particular require careful attention:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Subcontracting rules have been rewritten. \n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t
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Under the Merged Scheme, it is the company that commissions the R&D \u2014 not the one carrying it out \u2014 that is typically entitled to claim. Misapplying this rule means claiming costs that do not qualify, which increases enquiry risk considerably.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Overseas costs no longer qualify. \n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tExpenditure relating to subcontractors or externally provided workers carrying out R&D outside the UK is no longer eligible. For clients with international development teams \u2014 common in software, fintech, and advanced manufacturing \u2014 this materially changes the scope of a claim and must be identified early, not at the point of filing.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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ERIS eligibility needs checking on every SME claim. \n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t
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The Enhanced R&D Intensive Support scheme remains available to SMEs spending at least 30% of total expenditure on qualifying R&D, offering a more generous benefit than the standard Merged Scheme rate. It is worth assessing for every eligible client \u2014 but it requires additional analysis that adds to preparation time.<\/p>

These are not edge cases. They are questions that now arise on almost every R&D engagement, and getting them wrong carries real consequences for clients and advisers alike \u2014 making HMRC tax adviser registration<\/a> and compliance awareness more critical than ever<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Why Claiming R&D Tax Credits Requires More Documentation\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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One of the most persistent challenges practices face is the gap between how clients hold their R&D information and how HMRC expects to receive it.<\/p>

Most businesses do not maintain project records in a format that aligns with HMRC’s requirements. Technical information is typically spread across emails, project management tools, internal reports, and the memories of developers or engineers who were doing the work \u2014 not the finance team trying to document it months later.<\/p>

Closing that gap requires significant effort from the accounting practice, including:<\/p>