Research and Development (R&D) tax relief has undergone a total transformation. We are now operating under the "Merged Scheme," which brought together the old SME and RDEC regimes into a single 20% expenditure credit.
While the headline rate is attractive, HMRC has significantly increased its scrutiny. At CoreAcc Accountants, we’ve seen a massive rise in "compliance checks" where claims are being rejected not because the science was wrong, but because the paperwork didn't meet the new, stricter standards.
The "Additional Information Form" (AIF)
The biggest hurdle for any 2026 claim is the mandatory Additional Information Form. This must be submitted digitally before you file your company tax return. If you miss this step, your R&D claim is automatically invalidated by HMRC's systems—there is no longer a "grace period" for missing paperwork.
This form requires a deep dive into:
● Technical Uncertainties: You must explain exactly why your project wasn't a straightforward fix for a competent professional.
● Direct vs. Indirect Costs: HMRC is now strictly separating "qualifying indirect activities" (like administration or maintenance) from core R&D work.
● Senior Internal Sign-off: A named director of your company must now personally take responsibility for the accuracy of the claim.
The New Restrictions on Overseas Spend
For many years, UK companies used overseas contractors or "Externally Provided Workers" (EPWs) to build their software or prototypes. Under the 2026 rules, this is much harder.
Generally, any R&D work performed outside the UK is now excluded from your claim unless you can prove that it was "wholly unreasonable" to perform the work in the UK (e.g., due to specific geographical or environmental conditions). Saving money on developer rates is not considered a valid reason by HMRC.
Why the "Success Fee" Model is Changing
With the increased risk of HMRC audits, the old "fly-by-night" R&D consultants who take a massive percentage of your claim are being pushed out. Companies now need a robust, evidence-based approach that stands up to an inspector’s questions six months down the line.
How CoreAcc Accountants Can Help
We don't just "file" R&D claims; we build them to last. Our team provides:
● Claim Pre-Screening: We’ll tell you honestly if your project meets the 2026 definition of R&D before you spend time on the paperwork.
● AIF Preparation: We handle the complex technical writing and cost breakdowns required for the Additional Information Form.
● Contract Review: We’ll check your agreements with subcontractors to ensure you (and not they) are the ones legally entitled to the tax relief.
● Audit Defence: If HMRC does open an enquiry, we stand by our work and handle the correspondence on your behalf.
Get in Touch
Don't leave your R&D claim to chance. Let CoreAcc Accountants ensure your innovation is rewarded, not penalized.
