Startups often operate under intense financial pressure. Balancing product development, team growth, and market fit can leave little room for error. R&D tax relief remains one of the most valuable funding tools for UK businesses pursuing technological or scientific advancement—but it’s not automatic or guaranteed.

What Is R&D Tax Relief?

Research and development tax relief is a government incentive designed to support innovation in science and technology. For eligible companies, it may provide a cash credit or reduce the company’s Corporation Tax bill. However, recent reforms have tightened compliance requirements.

Understanding the Scheme

The merged scheme, which now applies to UK companies from April 2024, unifies the previous reliefs for small and large businesses. It still offers meaningful financial support; but only when activities can be evidenced to advance science or technology and overcome field-wide uncertainties. Companies must also comply with new digital filing rules and provide detailed technical and cost breakdowns.

Do You Qualify?

Eligibility depends on two key factors:

• Your company is attempting to advance scientific or technological understanding in your field.
• Your project faces technical uncertainty that cannot be easily resolved using existing knowledge or commercially available solutions.

For startups, this may involve developing new algorithms, novel manufacturing techniques or new groundbreaking solutions. Routine development or commercial uncertainty, however, does not qualify.

What Can You Claim For?

From April 2023, the scope of relief will expand to include areas like pure mathematics. This is particularly important for AI, fintech, and deep tech startups working with algorithms, risk models, or quantum systems.

Qualifying costs include:

• Salaries and related employer costs
• Externally provided workers and subcontracted R&D work (mostly UK-based)
• Software and cloud computing costs used for R&D
• Consumables used in the course of experimentation

Overseas R&D costs are now restricted unless qualifying exceptions apply, such as unavoidable geographical constraints.

Important Changes Ahead

Since April 2023, new claimants must pre-notify HMRC in advance of intent to claim. All claims must be submitted digitally and accompanied by an Additional Information Form. With HMRC increasing its scrutiny and focusing on claim quality, the importance of submitting accurate, well-supported applications on time has never been greater.

Let Inventya Help You Claim With Confidence

Navigating the R&D tax relief process requires more than ticking boxes. It demands technical insight, detailed evidence, and a solid understanding of the latest regulations.

At Inventya, we specialise in helping innovative businesses unlock the full value of their development efforts. We handle the technical write-up, financial calculations, and submission process so you can focus on what you do best: building the future.

Whether you’ve never claimed before or want to ensure your submission, we’re here to support you every step of the way.

📞 Ready to explore your eligibility?
Contact us today to book a consultation.

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