If your business is solving technical problems, developing new products, or improving existing processes, you could be eligible for substantial R&D tax relief. Praxis helps technology companies, creative businesses, and professional practices identify qualifying expenditure and prepare robust claims that stand up to HMRC scrutiny.

The Merged R&D Scheme: What You Need to Know

From 1 April 2024, the UK’s R&D tax relief landscape changed significantly with the introduction of the merged scheme, replacing the previous SME and RDEC regimes for most companies. Here’s how it works:

For most companies: A taxable above-the-line credit of 20% of qualifying R&D expenditure, resulting in an effective benefit of approximately 15% (after corporation tax at 25%). This applies to both SMEs and large companies under the merged scheme.

For R&D-intensive SMEs: Loss-making companies where qualifying R&D expenditure represents 30% or more of total expenditure can claim under the enhanced R&D intensive support (ERIS) scheme, providing a higher rate of relief through a payable tax credit.

Subcontracted R&D: Under the merged scheme, the company that decides to undertake R&D makes the claim, even where work is subcontracted to others.

What Qualifies as R&D?

HMRC defines R&D broadly as projects that seek to achieve an advance in science or technology. The key test is whether a competent professional in the field could not easily work out the solution. This includes:

• Developing new software, platforms, or algorithms
• Creating new products, materials, or processes
• Overcoming technical uncertainty in engineering or design
• Building bespoke internal systems or tools that require innovation
• Improving existing products or processes where the improvement requires resolving technological challenges

Crucially, projects do not need to succeed to qualify. If you attempted to resolve a technological uncertainty, the expenditure can still be claimed.

R&D in Your Sector

Technology Companies: Software development, cloud architecture, AI/ML model development, data engineering pipelines, cybersecurity solutions, API integrations overcoming technical limitations, and performance optimisation work.

Creative Agencies: Development of proprietary tools and platforms, interactive experiences using emerging technologies, bespoke content management systems, and projects involving VR/AR or generative AI.

Architecture and Engineering: Computational design, innovative structural solutions, sustainability engineering, BIM tool development, and new construction methodologies.

The Praxis R&D Process

1. Discovery meeting — We sit down with your technical team to understand what you’re building and where the challenges lie. We ask the right questions because we understand your sector.
2. Qualifying project identification — We review your projects against HMRC criteria and identify all eligible work, including projects you might not have considered.
3. Expenditure analysis — We quantify qualifying costs including staff time, subcontractor costs, software, cloud computing, and consumables.
4. Technical narrative — We prepare a detailed, HMRC-ready report explaining the technological uncertainties and advances in each project.
5. Claim submission and support — We file the claim and handle any HMRC enquiries. Our claims are built to withstand scrutiny.

Why Praxis for R&D Tax Credits?

We’re accountants, not claim factories

Unlike specialist R&D firms that process claims in volume, your Praxis claim is prepared by qualified Chartered Tax Advisers who understand the wider tax implications and can integrate R&D relief into your overall tax strategy.

Sector knowledge that identifies more

Because we work with technology, creative, and professional services businesses every day, we often identify qualifying projects that other advisers miss.

Built to withstand scrutiny

HMRC is increasing its review of R&D claims. Our technical narratives are thorough, evidence-based, and prepared to a standard that stands up to enquiry.

Next steps

Think your business might qualify? Get in touch for a free initial assessment. We’ll quickly tell you whether R&D tax credits could work for your company — and give you an indication of the potential value.