The merged R&D tax relief scheme: What does it mean?

The merged R&D tax relief scheme: What does it mean?

The landscape of incentives for Research and Development (R&D) in the UK has witnessed a significant transformation with the rollout of the merged scheme for R&D tax relief.

Overview of the merged scheme: Changes & impact

The merged R&D tax relief scheme, introduced for accounting periods beginning on or after 1 April 2024 to encourage British innovation, consolidates previous tax incentives into a single, unified framework. Businesses, both large and small, now access R&D tax relief through a harmonised process, designed to reduce complexity and encourage broader participation.

The changes aim to boost accessibility, drive investment in high-impact projects, and ensure that the UK remains competitive on the global innovation stage. Early reactions from the business community highlight increased clarity, faster claims processing, and a renewed appetite for R&D activities.

The latest R&D trends

Hot off the press, the Office for National Statistics reports a surge in R&D claims post-scheme, with a 12% year-on-year rise in claims and a record £47 billion invested in R&D across sectors in 2024. Notably:

• Green technology: Cleantech and sustainability projects now account for 18% of total R&D claims, up from 11% just two years ago
• Digital transformation: AI-driven R&D claims have doubled, reflecting the UK’s push towards digital leadership
• Regional growth: The merged scheme’s simplified access has seen a 22% increase in first-time claimants outside London, levelling up innovation nationwide

This data underscores a vibrant, rapidly evolving R&D environment, with businesses quick to adapt and capitalise on new opportunities.

The time to innovate is now

The merged R&D tax relief scheme represents the Governments continued drive to encourage and reward UK innovation. With streamlined procedures, there’s never been a better time for businesses to invest in R&D and claim R&D tax relief. Seize the opportunity, review your R&D plans, and help shape the future of British enterprise. It's time to make your innovation count.

To download the full merged R&D tax relief scheme document, please click here. 

If you wish to discuss this in further detail, please contact one of our Business Tax experts here.