Before the budget: Is your R&D claim in order?

The Autumn Budget is scheduled for 28 October 2026. Whatever the Chancellor announces on R&D tax relief (and there are good reasons to expect stability rather than further structural reform), businesses that have their affairs in order will be better placed than those waiting to react.

The R&D tax relief system has already changed substantially. HMRC’s compliance focus has intensified. Rejection rates have risen sharply. And the administrative requirements around making a claim are now considerably more demanding than they were even three years ago.

September and October are the right time to review your position, not because the Budget will necessarily change the rules. But, because the existing rules require more preparation than many businesses realise.

Know which scheme applies to you

Most companies now claim under the merged RDEC scheme, which carries a 20% taxable credit, translating to roughly a 15% net benefit for profitable businesses. Loss-making, R&D-intensive SMEs that spend a significant proportion of their total expenditure on qualifying R&D may qualify for Enhanced R&D Intensive Support (ERIS), which offers a higher rate of 27%.

If you claimed under the old SME scheme and haven’t revisited your numbers under the merged rules, the effective benefit may look different. Getting clarity on which scheme applies (and what that means for your projections) is a sensible first step before year-end planning begins.

Check your notification deadline

This is the most time-critical issue for many businesses right now. First-time claimants, or companies that haven’t claimed in the past three accounting periods, are required to submit a claim notification to HMRC within six months of the start of the relevant accounting period.

For businesses with an accounting period beginning 1 April 2026, that deadline is 30 September 2026, and weeks before Budget day. Missing it is not a recoverable error. HMRC will not accept a late notification, and the claim for that period is lost entirely. If there is any doubt about whether this applies to your business, it needs to be checked immediately.

Prepare your Additional Information Form

Every R&D claim must now be supported by an Additional Information Form (AIF), submitted through HMRC’s R&D portal. This is not optional and it is not a formality. Claims submitted without a valid AIF are automatically rejected.

The AIF requires at least three project descriptions covering 50% of the claim value. For each project you must set out the technical advance you were seeking, the scientific or technological uncertainty you were working to resolve, and the qualifying expenditure attributable to that project. Writing this well, in language that clearly demonstrates why the work goes beyond routine development takes time and technical input from the people who did the work.

Leaving the AIF until the filing deadline creates unnecessary pressure and increases the risk of a poorly described claim. Start gathering the information now.

Build your documentation while the work is fresh

HMRC’s Mandatory Random Enquiry Programme reviews approximately 30% of submitted claims. Rejection rates rose from around 5% in 2020 to 18% in 2023/24. The claims that struggle most under scrutiny are those where technical documentation was assembled retrospectively, months or years after the qualifying work was completed.

What HMRC wants to see is a contemporaneous record of how your team identified a technical challenge, what approaches they tried, what didn’t work, and how they ultimately resolved the uncertainty. Staff time records linking individuals to specific R&D projects, technical decision logs, test results and project notes all contribute to a robust claim.

If your documentation is thin for the current period, September is the time to address it, while the work is recent enough to reconstruct accurately.

Consider advance assurance for complex claims

In May 2026, HMRC launched a targeted advance assurance pilot allowing eligible SMEs to seek clarity on complex or higher-risk areas of a potential claim before it is submitted. If your R&D involves genuinely novel technical territory, subcontractors, overseas activity, or unusual cost structures, the advance assurance route may be worth exploring. It offers a degree of certainty that is difficult to achieve any other way.

Don’t wait for budget certainty

Industry voices (including advisers and the Campaign for Science and Engineering) have made clear that what businesses need most right now is stability. The system has changed significantly in recent years and needs time to bed in. Waiting to see what the Budget brings before starting your claim process is a risk that gains nothing.

The most effective R&D claims are built throughout the year, not assembled in the weeks before filing. Whatever October brings, the businesses in the strongest position will be the ones that started preparing in September.

Knight R&D works with businesses at every stage of the process from reviewing whether activity qualifies, through building technical evidence and preparing the AIF, to managing HMRC enquiries if they arise. If you want to review your current position ahead of October, speak to our team.