HMRC's new “promotional material”: what does it mean for businesses? 

At the end of July, HMRC released new “promotional material” on R&D tax credits, titled “Introduction to R&D Tax Reliefs – Help to see if your company can claim”. Essentially, this is a back-to-basics guide on what the incentive is, the criteria that apply and next steps for those wishing to claim. 

What does the material cover? 

It points to HMRC’s interactive R&D eligibility tool launched last Autumn as a mechanism for helping to understand whether projects might qualify, as well as linking through to its guidance on eligible costs. It also highlights procedural requirements such as claim notification and the additional information form for those who do intend to claim, in addition to signposting the different schemes that might apply. 

Interestingly, the material appears to be aimed at SMEs – the group that last September was revealed to be making significantly fewer R&D claims than in previous years. The R&D statistics published in 2025 highlighted that in 2023/24, SME claims had dropped by 31%, with an even steeper 45% decline in first-time SME claims. The relief claimed under the RDEC scheme (£4.41bn) meanwhile, surpassed the total for the SME scheme (£3.15bn) for the first time. In part this was accounted for by an increase in the RDEC rate, but it’s likely that other factors such as a decrease in the headline rate for loss-making SMEs from 33.3% to 16.2% and complex rule changes in areas such as contracted-out R&D, played a part.

Impact of timing 

It is also notable that HMRC’s promotional material has appeared following its announcement at the RDCF earlier this year that its volume compliance approach to R&D enquiries, run by ISBC, will end. This followed a sustained fall in the level of error and fraud in R&D from its 2022 peak. While we support HMRC’s efforts to weed out error and fraud, we have also raised concerns that legitimate SME claimants may be disproportionately put off claiming owing to the possibility of being caught in HMRC’s compliance net.

Could HMRC’s latest guidance then, be interpreted as an attempt to raise awareness amongst SME claimants that may have been deterred from claiming entirely or submitted conservative claims? HMRC’s recent announcement on ISBC is not the only insight we’ve had recently that error and fraud has declined to more manageable levels. The publication in July of HMRC’s annual statistics revealed that policy and operational changes to the relief have reduced error and fraud to 6.4% (£493 million) for 2023/24. The figure for 2024/25 and 2025/26 is estimated to decline further, to around 5.3%.

Actionable insights for businesses 

Irrespective of whether HMRC’s promotional material is a response to the publication of recent figures, we have previously expressed concern that SMEs have been deterred from claiming – either entirely or for a reduced amount. This is due to a combination of rate changes, procedural challenges and a heightened compliance environment. We expect September’s upcoming R&D statistics to reinforce this trend, with the full effect of the introduction of the merged scheme being reflected.

Yet, with the right support, claiming the incentive remains a valuable tool to help businesses reduce the cost of innovation and reinvest in growth. Earlier this year, to help SMEs as well as larger businesses, determine whether they are claiming the correct amount, we launched Claim Clarity, a free, independent review of a business’s most recent R&D tax claim. It provides an objective assessment of the claim, determining whether there are any missed opportunities to optimise value, while also identifying potential risks.

While we hope that previous claimants will make use of Claim Clarity to assess the value of their claim, legitimate first-time claimants should be encouraged to assess their eligibility too. Alongside the DSIT Guidelines, HMRC’s eligibility tool is a useful starting point if you are new to R&D tax relief and want to get a sense of whether a project might qualify. As we highlight in our blog though, it has been designed to err on the side of caution and it’s possible to return a negative or inconclusive result, though that doesn’t necessarily mean that the project won’t qualify.

For businesses unsure about whether a project qualifies or what costs can be claimed, it remains key to seek professional advice. As the UK’s leading R&D tax relief adviser, ForrestBrown has a strong track record of supporting SMEs and is ideally placed to advise businesses on eligibility, claim optimisation and risk management. 

We draw on the skills of our tax, accounting, legal and industry-experienced technical experts to provide end-to-end claim support, giving all businesses the ability to navigate R&D tax relief with confidence.