Making a R&D Tax Credit Claim: A Step-By-Step Guide

Looking to make a R&D tax credit claim? Here’s our step-by-step guide on how to submit your R&D tax claim in 2025.

Navigating the R&D tax credit claim process can be straightforward if you break it down into manageable steps. With recent reforms, the process has become more structured, making it essential to understand each stage clearly.

Here’s a step-by-step guide to submitting your R&D tax credit claim in 2025.

Step 1: Identify qualifying projects and track costs

An R&D tax relief claim begins with your R&D projects. However, before you can identify your projects and track the associated costs, it’s important to understand what constitutes an R&D project.

What is an R&D project?

An R&D project is a set of activities, undertaken methodically, to achieve an advance in science or technology. It doesn’t need to be successful to qualify, but it must qualify as R&D work.

For your project to qualify for R&D tax relief, it has to meet HMRC’s requirements:

• Advance in science or technology: Your project must seek to push the boundaries of knowledge or capabilities in your field. It’s about creating something new or making significant improvements to what already exists. Think globally—your innovation should be something the world hasn’t seen before.
• Competent professional: The R&D activities must be carried out by individuals who are qualified and experienced in the field. This isn’t just anyone; it’s someone with the expertise to tackle the scientific or technological challenges your project faces.
• Scientific or technological uncertainties: Your project should involve work that isn’t straightforward. If a competent professional in the field wouldn’t know how to achieve the desired outcome without some experimentation and problem-solving, you’re likely on the right track. It’s about addressing the unknown and overcoming significant challenges.

Tip: Consistently track and document all R&D projects and their associated costs throughout the year to ensure you have detailed records when it’s time to make your claim. Costs to track include salaries, subcontractor costs, materials, and any other qualifying expenditure.

Step 2: Determine which R&D tax relief scheme you need to apply through

Several factors will determine which R&D tax scheme you should apply for.

For accounting periods beginning on or after April 1, 2024, there’s the merged R&D expenditure credit scheme and the Enhanced R&D Intensive Support Scheme (ERIS).

R&D Scheme (from 1st Apr 2024)	Description	Net Benefit	Key Features
Merged R&D Expenditure Credit Scheme (RDEC)	The standard scheme for all companies doing R&D.	14.7% – 16.2% (depending on Corporation Tax rate)	Above-the-line credit, offsets Corporation Tax, PAYE/NIC cap applies.
Enhanced R&D Intensive Support Scheme (ERIS)	For loss-making R&D-intensive SMEs (at least 30% of total expenses on R&D).	Between 12.5% and 27%	Higher credit rates, not subject to Corporation Tax, PAYE/NIC cap applies.

For accounting period that begin before April 1, 2024, there are two R&D tax credit schemes: the Research and Development Expenditure Credit (RDEC) and Small-Medium Enterprise (SME) schemes:

R&D Scheme (before 1st Apr 2024)	Description	Net Benefit	Key Features
RDEC Scheme	For large companies and certain SMEs.	20% gross, 15% net	Above-the-line credit.
SME Scheme	For most SMEs.	Up to 27%	Higher credit rates, not subject to Corporation Tax.

Just a heads-up: Claiming under the wrong scheme can cause serious delays, and sometimes lead to an enquiry or even rejection from HMRC. Ensure you are completely certain that you are claiming under the correct scheme or schemes before advancing beyond step 2!

Step 3: Submit a Claim Notification (if applicable)

From 1 April 2023, first-time claimants, or those who haven’t claimed in the last 3 years, must submit a Claim Notification. This submission is mandatory, and it must be submitted no later than 6 months after the end of your accounting period.

To ensure you meet all the requirements for the Claim Notification, see our guide to R&D Claim Notifications for more information on this process.

Step 4: Complete the Additional Information Form (AIF)

The Additional Information Form (AIF) is required by HMRC to process your claim. It gathers detailed information about your R&D projects, including:

• Project descriptions: List each project, detailing the scientific or technological uncertainties faced and how they were overcome.
• Expenditure details: Provide a breakdown of qualifying expenditures, including staff, subcontractors, materials, and any relevant R&D costs.
• R&D intensity: If you’re claiming under ERIS, you’ll need to demonstrate your R&D intensity (i.e., the percentage of your company’s total expenditure spent on R&D).

Tip: Keep all relevant documentation organised throughout the year to make filling out the AIF easier and more accurate

Step 5: Produce an R&D tax credit report

Although not compulsory, providing an R&D tax credit report is advised by HMRC. It’s that extra bit of protection that lets you provide detailed support for the AIF, aiding compliance and reducing the likelihood of an enquiry. At EmpowerRD, we also provide an R&D tax credit report, it’s a really important part of the claiming process.

It should encompass the claim methodology, the use of sampling, details about the competent professionals involved and much more. If you need help with compiling an R&D tax credit report, we’d be happy to help.

Step 6: Prepare the Tax Computation

Now that you’ve completed the Additional Information Form (AIF) and gathered all the necessary data, it’s time to prepare the tax computation. This step ensures that your R&D tax credits are accurately reflected in your tax return.

Calculate Tax Credits: Accurately compute the tax credits based on the qualifying R&D expenditures identified in Step 1 and detailed in the AIF in Step 4. This includes:

• Qualifying Expenditures: Ensure that all direct and indirect qualifying R&D activities and costs are correctly accounted for.
• PAYE Contributions: Include PAYE and NIC contributions related to staff involved in the R&D projects.
• Accurate Calculations: Make sure that all calculations are precise and reflect the qualifying R&D costs correctly in your tax computations.

This step is crucial as it determines the amount of tax credit you will claim. Properly documenting these figures helps to avoid discrepancies and ensures compliance with HMRC requirements.

Next, you’ll need to report these calculations in your Company Tax Return (CT600) and the Supplementary R&D Form (CT600L).

Step 7: Prepare the CT600/CT600L or Amended CT600/CT600L

With your tax credits accurately computed in Step 6, the next step is to report these calculations on your Company Tax Return (CT600) and the Supplementary R&D Form (CT600L). This ensures that HMRC receives all the necessary information to process your R&D tax credit claim.

Initial or Amended Return: Depending on whether you are submitting an initial claim or amending a previously submitted return, complete the CT600 and CT600L forms:

CT600:

Company Tax Return (CT600): This form is used to report your company’s taxable profit and calculate the amount of Corporation Tax owed.

Ensure to include details of R&D expenditure and calculations as well as PAYE contributions.

CT600L:

Supplementary R&D Form (CT600L): This form is specifically for R&D tax credit claims, detailing either the SME R&D tax credit claim or the RDEC claim.

Steps for Completing CT600L:

Company Information:

L1: Enter the company name.

L2: Enter the company’s 10-digit Unique Taxpayer Reference.

Period Covered:

L3 and L4: Enter the start and end dates of the accounting period.

RDEC or SME Scheme:

L10 to L45: For RDEC claims, provide details of the qualifying R&D expenditure and calculate the RDEC.

L166 to L180: For SME R&D tax credit claims, provide details of the qualifying expenditure and calculate the payable tax credit.

Surrendered Amounts and Restrictions:

Enter details if there are any amounts brought forward or surrendered from group companies, and calculate any restrictions or offsets against other tax liabilities.

Step 8: Submit the Forms

Submit the CT600 and CT600L: Electronically via HMRC’s online portal or by post. Include the R&D tax credit report and receipt of AIF submission to confirm submission.

Tips for a Successful Claim

• Be thorough: Ensure detailed and accurate information in both the AIF and any supplementary reports.
• Stay Organised: Maintain organised records and documentation to support your claim.
• Consult experts: Consider consulting an R&D tax credit specialist for advice and review to ensure compliance and accuracy.

At EmpowerRD, we guide you through these steps effortlessly with the support of our skilled advisors and proprietary platform. Your claim will not only be optimised but also compliant, ready to withstand HMRC scrutiny. If you wish to explore claiming your R&D tax credits, reach out to our team for a discussion.

Supporting over 1,200+ companies to make successful claims we’re here to support you every step of the way.