R&D Tax Relief After the 2024 Changes: What Every CFO Needs to Know

Few areas of UK corporation tax have experienced as much change in recent years as Research & Development Tax Relief. For many businesses, these reforms have created uncertainty. Questions surrounding eligibility, compliance and HMRC enquiries have led some companies to delay claims altogether, while others have become increasingly cautious about undertaking innovation projects.

Yet despite the legislative changes, one fact remains unchanged: the government continues to support genuine innovation. The challenge for today's CFO is no longer whether R&D tax relief exists. The challenge is understanding how to navigate the new rules confidently and compliantly.

Why Were the Rules Changed?

HMRC has significantly increased its focus on compliance. The objective has been to reduce abuse of the scheme while ensuring genuine innovators continue to receive support. Over recent years, HMRC identified increasing levels of incorrect claims, poor technical evidence, weak project narratives, unsupported cost calculations, and claims submitted without sufficient technical understanding. Rather than reducing support for innovation, the reforms are designed to improve the quality of submissions.

The Merged Scheme

One of the biggest changes was the introduction of the merged R&D tax relief scheme, which largely replaces the former SME and RDEC regimes for accounting periods beginning on or after 1 April 2024, although separate enhanced support remains available for qualifying loss-making R&D-intensive SMEs. For many businesses, this also brings revised rates and rules.

For CFOs, this means understanding which regime applies to the business, how the effective benefit is calculated and how R&D activity should be incorporated into wider financial planning. The technical detail is important, but so is understanding the commercial impact.

Enhanced Support for R&D-Intensive Companies

Alongside the merged scheme, enhanced support remains available for qualifying R&D-intensive loss-making SMEs through the Enhanced R&D Intensive Support (ERIS) regime. ERIS is available only to loss-making SMEs that meet the R&D intensity conditions, broadly where qualifying R&D expenditure represents at least 30% of total expenditure, subject to the applicable grace-period rules. Businesses that meet these conditions may be eligible for a higher level of support than under the standard merged scheme.

For early-stage technology companies, life sciences businesses and innovation-led organisations, this can represent a significant funding opportunity. CFOs should ensure this assessment forms part of year-end planning rather than assuming all businesses receive identical treatment.

Additional Information Forms

For R&D claims submitted on or after 8 August 2023, an Additional Information Form must normally be submitted before the Company Tax Return containing the claim. Without it, HMRC may remove the claim from the return. This form requires structured information, including details of qualifying projects, technical uncertainties, competent professionals, qualifying expenditure and company details. The quality of this information plays an important role in supporting the overall submission.

Claim Notification Requirements

Some businesses making claims for the first time, or after a gap, may also need to complete HMRC's claim notification process. Missing this requirement can result in otherwise valid claims becoming ineligible. For finance teams managing busy reporting cycles, this highlights the importance of planning well before the corporation tax deadline.

The Competent Professional Has Become Even More Important

One of the most significant aspects of the reforms is HMRC's continued emphasis on the competent professional. The assessment should be informed by a competent professional with relevant knowledge and experience in the field of science or technology, able to explain the technological baseline, the uncertainties faced, why the solution was not readily deducible, and how those uncertainties were addressed.

For CFOs, this means ensuring technical teams are engaged throughout the claim process rather than attempting to reconstruct evidence months later.

Documentation Is No Longer Optional

The strongest claims are supported by contemporaneous evidence, such as project documentation, design notes, technical meeting minutes, testing records, development plans, software repositories, engineering drawings, prototype iterations and time allocation records. Good governance makes future claims significantly easier.

HMRC Enquiries Continue to Increase

Although enquiry activity has increased, this should not discourage legitimate businesses from claiming. Instead, businesses should view enquiries as another reason to strengthen internal processes. A well-prepared claim supported by robust technical evidence places businesses in a far stronger position should HMRC request further information.

What This Means for CFOs

The finance function now has a greater role than ever. Rather than viewing R&D tax relief as an isolated tax exercise, CFOs should ensure there are clear internal processes for identifying qualifying projects early, recording qualifying expenditure accurately, engaging technical specialists throughout the year, maintaining supporting documentation, forecasting anticipated relief, and preparing for year-end submissions well in advance. These steps reduce risk while improving the quality of future claims.

Why Specialist Support Is Becoming More Valuable

The legislative changes have increased the technical complexity of preparing high-quality R&D claims. Businesses must now demonstrate not only that qualifying activity took place, but also why it qualifies and how expenditure has been calculated. This requires expertise across tax legislation, finance and the relevant technical discipline. Working alongside an experienced R&D specialist enables finance leaders to access that expertise without placing additional pressure on internal teams.

How PSS Tax Supports Finance Leaders

PSS Tax works in partnership with CFOs, Finance Directors, accountants and technical teams to prepare compliant, evidence-based R&D tax relief claims. Our role extends beyond preparing submissions. We help businesses establish stronger internal processes, identify qualifying opportunities earlier, prepare robust technical documentation and provide support should HMRC raise any questions. By integrating R&D into wider financial planning, we help finance leaders unlock legitimate funding while managing compliance risk.

Final Thoughts

The UK's R&D tax relief landscape has undoubtedly changed. However, innovation remains a cornerstone of economic growth, and genuine businesses continue to benefit from meaningful government support. For CFOs, the opportunity is not simply to understand the legislation. It is to build stronger governance, improve forecasting and incorporate R&D tax relief into a broader financial strategy.

Businesses that adapt to the new rules will be better positioned to access funding, support innovation and invest confidently in future growth. With the right specialist support, the changes introduced in 2024 become less of a barrier and more of an opportunity to strengthen the quality, resilience and long-term value of every R&D claim.