In the R&D field, the 2026 Budget has brought welcome news for UK businesses investing in research and development (R&D), with the Government announcing changes designed to simplify the R&D tax relief claims process and reduce administrative burdens.
While the Budget does not introduce new R&D tax credit rates, its focus is on making the existing system easier for businesses to navigate.
What are the key changes?
The Government has announced two significant administrative changes:
1. Removal of the Claim Notification Form
From 1 April 2027, the R&D tax relief Claim Notification Form will be removed. Currently, certain companies making an R&D claim for the first time, or returning after a gap, must submit this notification within a specified timeframe. Removing this requirement should make the process simpler and reduce the risk of businesses missing out on relief due to administrative deadlines. This is a very welcome step forward and reduces the risk of companies leaving money on the table.
2. Simplification of the Additional Information Form
From autumn 2027, the Additional Information Form (AIF) will be simplified. This form provides HMRC with details about a company’s qualifying R&D activities and expenditure. Streamlining the information required should help reduce the administrative workload for businesses preparing claims.
What does this mean for businesses?
These changes are a positive step towards improving accessibility to R&D tax relief, particularly for SMEs and innovative companies with limited internal tax resources.
However, businesses should not assume that claiming will become automatic. HMRC will continue to expect robust evidence demonstrating qualifying R&D activities, eligible expenditure and genuine technological or scientific advancement.
Therefore, it is still essential that businesses engage with a suitable professional to help guide then through the process. Ideally, this would be someone regulated by the ICAEW or ACCA.
How should businesses prepare?
Companies should continue maintaining detailed project records, tracking eligible costs and seeking specialist advice where necessary.
The 2026 Budget signals a welcome move towards a simpler R&D tax relief system. Businesses investing in innovation should review their current activities and ensure they are not missing out on valuable tax relief.
Where they are unsure, Dafferns will be happy to have a no-obligation conversation.
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