by Sam Swansborough
Business Tax Director
30 June 2026
Articleby Sam Swansborough
Business Tax Director
For many innovative businesses, R&D tax relief remains a vital source of funding. It supports growth, extends cash runway and often plays a role in strategic decision making. However, as HMRC scrutiny increases and investors become more forensic, the conversation around R&D is changing.
The HMRC data issued for 2023/2024 shows that 17% of R&D claims are reviewed, meaning nearly one in five claims can expect some level of compliance intervention. HMRC has also reported a significant reduction in claim volumes following compliance reforms.
A changing risk landscape
Over recent years, HMRC has placed far greater emphasis on the quality and credibility of R&D tax claims. Enquiries are more frequent, compliance checks more detailed and the threshold for acceptable evidence higher. For businesses that have relied on aggressive interpretations or poorly documented claims, this has introduced a new level of risk.
At the same time, R&D tax relief is being scrutinised outside HMRC. Investors, lenders and buyers increasingly view R&D tax relief claims as part of their wider due diligence process. Historic claims are examined not just for value, but for credibility. Any uncertainty can quickly turn into questions over governance, controls and financial reliability.
In this environment, R&D tax relief must be treated as a strategic finance issue, not an opportunistic tax benefit.
When the process becomes the problem
A common frustration we hear from businesses is not the complexity of R&D itself, but the inefficiency of the claims process. Repeated requests for additional documentation, vague explanations of eligibility, and prolonged back-and-forth with advisers can turn what should be a supportive relief into a drain on management time.
This is often a symptom of a flawed approach. When claims are assembled retrospectively, or when advisers lack a strong understanding of the business’s technology and commercial objectives, uncertainty creeps in. The result is friction internally and exposure externally.
A robust R&D process should capture the right information once, creating a claim that is straightforward to explain and defend.
The value of experienced support
The quality of an R&D claim depends on more than technical knowledge of the legislation. Strong advisers combine tax expertise, sector knowledge and commercial understanding. At James Cowper Kreston, we focus on fair fees, senior-led delivery and tailored reports that reflect each client's specific activities and objectives.
Growth, change and opportunity
Periods of change can expose weaknesses in historic R&D claims.
Expanding development teams, setting up new UK or overseas hubs, or accelerating hiring plans can all raise questions about eligibility. Without foresight, businesses risk assuming that yesterday’s approach will still apply tomorrow.
Similarly, key personnel changes — such as a CTO or lead developer leaving — can present hidden risks. If R&D knowledge sits with individuals rather than within documented processes, valuable context can be lost before it is reflected in a claim.
For growing businesses, proactive R&D planning is essential and can create opportunities. Ensuring R&D relief can support expansion, not introduce uncertainty at exactly the point when clarity is needed most.
The new CFO effect
New finance leaders often bring a fresh perspective. It is not uncommon for an incoming CFO to review historic R&D claims with a healthy level of skepticism seeking to ensure good governance and ensuring claims are correct and complete. This review process can both create valuable opportunities ensuring claims include all relevant projects and costs but also ensure that independent reviews, clearer documentation and a revised approach can quickly restore confidence and reduce ongoing risk.
R&D and the exit conversation
Perhaps the most overlooked aspect of R&D claims is their role in exit planning.
During due diligence, buyers and their advisers examine R&D claims not only for financial impact, but for sustainability and risk. Inconsistent narratives, unsupported assumptions or aggressive historical positions can all slow transactions or, in some cases, reduce value.
A clean, defensible R&D history signals strong governance and reduces the risk of post-completion disputes. Businesses that address this early are far better placed when an exit opportunity arises.
A more mature approach to R&D relief
R&D tax relief remains a powerful incentive for innovation, but the environment has matured. The most resilient businesses are those that view R&D claims through a wider lens — considering HMRC scrutiny, investor confidence, operational efficiency and future strategic goals.
Ultimately, the strongest claims are those that can be clearly explained, consistently supported and confidently defended — today, and in the years to come.
How we can help
At James Cowper Kreston, we take a considered, senior-led approach to R&D tax relief. Our focus is not simply on maximising a single year’s claim, but on building a defensible, sustainable R&D position that supports your wider business objectives.
We work closely with founders, CFOs and technical leaders to ensure claims are grounded in a clear understanding of the underlying innovation, supported by robust documentation and aligned with HMRC’s current expectations. Senior specialists lead our R&D engagements from start to finish, ensuring continuity, commercial insight and accountability throughout the process.
Our approach helps businesses to:
If you are reassessing historic claims, preparing for growth, funding or exit, or simply want greater confidence in your R&D tax relief position, please get in touch with our team.