R&D tax relief remains one of the most valuable reliefs available to UK SMEs. The merged scheme introduced from April 2024 simplified the structure, but it didn't reduce the compliance burden — if anything it increased it. HMRC has significantly tightened its approach since 2023, and weak claims are being rejected at scale.

Total R&D claims fell by 26% year-on-year to 46,950 in 2023/24. Around 20% of claims now receive an enquiry or compliance check. The message from HMRC is consistent: the activity may qualify, but the evidence often doesn't.

What changed under the merged scheme

First-time claimants must now pre-notify HMRC within six months of the accounting period end before a claim can be made. The claim must be accompanied by an Additional Information Form with detailed evidence linking qualifying spend to R&D activities. A senior officer of the company must be nominated to approve the submission.

HMRC can open an inquiry up to six years after the end of the accounting period. Claims that were accepted at the time can be revisited if the evidence doesn't hold up on examination.

The evidence problem

Most failed or clawed-back R&D claims fail not because the activity doesn't qualify but because the records weren't kept during the year. HMRC wants to see project scoping notes, staff time records linked to qualifying projects, contractor invoices with clear project attribution, and technical documentation showing scientific or technological uncertainty existed.

Attempting to reconstruct this evidence at year-end from memory is both time-consuming and unreliable. Contemporaneous records are what today's submissions require.

The reconstruction approach, which worked under the old regime, is now a significant risk.

Where the bookkeeping problem sits

The evidence gap isn't an accounting problem. It's a bookkeeping problem. Staff time needs to be allocated to qualifying projects as it's incurred. Contractor invoices need to be coded to the relevant R&D activity at the time of processing. Cloud and materials costs need to be tracked per project throughout the year. This is a recurring, ongoing admin task, not a year-end exercise.

What we do

We maintain contemporaneous cost records throughout the year: staff time allocations by qualifying project, contractor invoices coded to R&D activity, cloud and materials costs tracked per project. When the accountant or specialist R&D adviser prepares the claim, the evidence is already assembled, not reconstructed under time pressure. The technical assessment of what qualifies stays with the accountant or specialist. The record-keeping that supports it stays with us.