R&D Tax Relief 2025: Founder’s Guide to the New Merged Scheme
Written by:
Daniel Scott
Partner & Head of Accounting
R&D Tax Relief in 2025: The Founder’s Guide to Innovation, Incentives & HMRC
If SEIS helped you raise capital, R&D Tax Relief is how you turn that investment into innovation. It’s the UK’s flagship incentive for founders building new technologies, testing AI models, automating systems, or solving tough engineering problems.
But the rules have changed, again. HMRC’s new merged R&D scheme came into effect for accounting periods beginning on or after 1 April 2024, unifying the old SME and RDEC regimes into one framework. This has blurred lines, tightened compliance, and left many startups wondering:
Do we still qualify? How do we evidence R&D correctly? And how do we avoid an HMRC enquiry?
This series unpacks the answers.
Why R&D Tax Relief Matters More Than Ever
According to HMRC’s September 2025 statistics, UK companies claimed £46.7 billion in qualifying R&D expenditure in 2022-23, but the number of SME claims fell by more than 20 %. HMRC now estimates error and fraud rates of 7.8 % overall and 14.6 % for SMEs.
That means one in seven claims could be challenged or denied.
So while R&D Tax Relief remains an incredible opportunity, it’s also a risk area for fast-growing startups. The aim of this series is to help founders:
- Understand what counts as R&D under HMRC’s definition of “scientific or technological uncertainty”.
- Navigate the new merged R&D scheme (2024/25), including the 20 % R&D intensity threshold, subcontractor limits, and overseas-spend rules.
- Learn how to evidence R&D activities correctly; logs, competent-professional notes, baseline research, and technical documentation.
- Avoid audit triggers and clawbacks by following a defensible, evidence-based claim process.
- Clarify how R&D interacts with State Aid, de minimis grants, SEIS/EIS funding, and Innovate UK support.
- Build internal record-keeping systems that satisfy HMRC’s guidance without creating admin nightmares.
- Benchmark against real case studies from software, AI and engineering startups that got it right; and those that didn’t.
What You’ll Learn in This Series
Over the coming weeks, we’ll break down every stage of the R&D journey, from understanding eligibility to surviving an HMRC enquiry ,using plain English and real startup examples.
- What Counts as R&D in 2025?
We translate HMRC’s definition of “scientific or technological uncertainty” into startup-friendly language. - Building a Bulletproof R&D Claim
How to structure your technical narratives, evidence your baseline, and identify the “competent professional.” - The New Merged R&D Scheme Explained
SME vs RDEC is now one scheme, we’ll unpack the new rates, intensity thresholds, and who wins or loses. - Record-Keeping for R&D: What HMRC Actually Wants
Turn ad-hoc notes and GitHub commits into compliant records HMRC will respect. - R&D and State Aid: Grants, SEIS & de minimis Headroom
Clarifying when aid counts toward limits and how to disclose correctly. - Surviving an HMRC R&D Enquiry
A founder’s guide to audit readiness: templates, communication tips, and what to do if you get “the letter.” - Advanced R&D:AI, Software & Data Science
How HMRC now distinguishes scientific vs commercial uncertainty in software and machine-learning projects. - R&D in Groups & Overseas Spend
The latest subcontractor and EPW rules and how to keep eligibility. - The R&D Founder Checklist (2025 Edition)
A downloadable questionnaire for internal pre-submission checks.
Why We’re Writing This
We’ve supported dozens of UK tech and SaaS companies through HMRC enquiries, revised AIFs, and complex claim reconciliations. Our goal with this series is simple: to make R&D Tax Relief understandable, defensible, and scalable.
If you’ve raised under SEIS or EIS and are now investing in development, this is the next stage of your funding lifecycle.
Follow the series, bookmark the guides, and if you’re unsure whether your project qualifies, get in touch.
