Most companies check this too late, after the accounting period has closed. We'd rather talk early, so your accounting periods starting this year aren't wasted.

What Counts As Qualifying R&D Work

Did your project try to resolve a genuine technological uncertainty that a competent professional working in your field couldn't easily solve? Routine upgrades usually don't qualify. Genuine scientific or technological uncertainty usually does. Many claims involve developing new software features or redesigning a process.

Why Payroll Is Often Where The Real Value Sits

A large part of most claims comes from staff time, not equipment. Developers, engineers, and technical project managers can have their time apportioned into a claim. Subcontractors and externally provided workers can also be included, under tighter evidence rules than before.

The rate of relief depends partly on whether HMRC treats your company as a small or medium-sized enterprise, or a larger business, and the test isn't as simple as headcount and turnover for owner-managed and scale-up companies. If another company holds 25% or more of your voting rights, HMRC may treat you as connected companies for R&D purposes, and partner companies, where the shareholding sits between 25% and 50%, are counted differently again. Voting rights above that threshold are what decide whether HMRC counts two companies as one for size purposes, and plenty of companies get this wrong without realising it. Group structures and intellectual property ownership both affect how a claim is put together, and we work with medium enterprises and small and medium enterprises just as often as sole-director companies. Every one of those companies gets the same scrutiny, and we'll tell you plainly whether you qualify before we take on the work.

Success fee arrangements typically run at 10% to 25% of the value of the claim. Fixed fee arrangements, more common for straightforward claims, usually land between £3,000 and £10,000.

Our actual rough price, based on recent projects, sits toward the lower end for established clients, and higher for first-time claims.

The price is a rough guide and the actual cost varies depending on your company size and how much evidence already exists. We'll always give a proper quote after a short call, not a guess from a website.

HMRC has stepped up compliance activity considerably for companies of every size. In 2023-24, compliance checks covered 17% of R&D claims, and 77% of the checks that were settled ended in an adjustment. HMRC also identified around £441m of incorrectly claimed tax relief through that activity. The average compliance check in 2023-24 took 246 days to resolve.

We Build Claims That Can Stand Up To An HMRC Compliance Check

We build claims with a proper technical narrative, project records, and cost calculations that hold up under questioning, so the evidence is already filed and ready if HMRC opens a check. We also sit down with your developers and engineers directly, because they can explain the technological uncertainty the way a competent professional working at HMRC expects to see, not an accountant who's never spoken to them.

If your company is loss-making, that doesn't rule you out of R&D tax relief. Under ERIS, loss-making SMEs that meet the intensity condition can surrender losses for a payable credit worth up to 14.5%, which turns into real cash rather than a reduction against future taxable profits.

For a business investing in an innovative project before it's generating revenue, that cash matters, long before it reaches profit.

How The PAYE Cap Affects Your Payable Credit

Payable credits aren't unlimited. The amount you can claim as cash is generally capped at £20,000 plus 300% of your company's relevant PAYE and National Insurance contributions liabilities for the period. Businesses with a small payroll but large R&D expenditure are most likely to hit this PAYE cap.

Profitable companies benefit differently. Their claim reduces Corporation Tax liability directly, or produces a payable credit under the standard merged scheme credit rate. Either way, R&D tax relief exists as a government incentive to reward genuine investment.

We've supported technology companies, engineering companies, and ordinary trading companies who assumed none of this applied to them. Loss-making companies are often the most surprised, assuming an R&D tax project only pays off once profitable. We check your R&D expenditure, your development R&D tax work, and your day-to-day project costs to confirm they qualify for tax purposes, and our services exist to make that R&D tax relief position clear. As an experienced accountancy firm, we understand the importance of assessing these costs accurately.

Before we go further with any business, we ask one simple question: does your business qualify? If your project doesn't qualify this year, we'll say so honestly, and if you think it might, that's exactly the kind of conversation companies come to us for. We'll ask straightforward questions about your innovative projects, your team, and your accounting periods, then tell you honestly whether there's a claim worth making.

Get in touch with Vexo Accounting today for a free quote on your R&D tax credit claim. There's no obligation, and no charge for the initial conversation, whatever the value of your claim turns out to be.