UK R&D tax relief and the US research credit for companies innovating on both sides
When your research, funding and people are split between the UK and the US, who can claim R&D relief depends on the detail. We work out which company can claim on each side, make sure the claims do not overlap, and prepare them so they stand up to HMRC and the IRS.
Free and no obligation. You get a written scope and fee before any work starts.
What decides your R&D claim on each side
The checks behind every merged scheme, ERIS and US research credit claim.
- EligibilityYour projects tested against the UK R&D definition and the US four part test.
- ClaimantWhich company can claim, based on who decides the R&D is carried out.
- Qualifying costsStaff, software, cloud and contractor costs, with overseas costs checked.
- UK claimThe merged scheme or ERIS claim built into your corporation tax return.
- US creditThe section 41 research credit calculated and claimed on Form 6765.
Where R&D claims go wrong in a US and UK group
These are the situations that most often change who can claim, or how much.
Your UK team builds, your US parent directs
The UK company does the development work, but the roadmap and budget are set in the US.
The risk: the UK company may not be able to claim for work the US parent commissions.
You took on US investment or a US parent
A new US investor or parent company now counts toward the size of your company.
The risk: ERIS may no longer be available, even though the UK company itself is small.
Some of your developers are outside the UK
You use contractors or outsourced teams in other countries for part of the work.
The risk: most overseas contractor costs stopped qualifying from April 2024.
Your US company pays for research in the UK
The US company funds work carried out by its UK subsidiary.
The risk: that research does not qualify for the US credit and is spread over 15 years for US tax.
Which UK R&D route could apply to you?
Up to five quick questions about your UK company. You will see the likely scheme, the typical benefit and the corridor issues to check first.
How the checker works: it helps a UK company in a US and UK group see which R&D relief route is likely to apply. It asks whether the company is loss making, how much of its spending goes on R&D, how large its worldwide group is, who decides the R&D is carried out and whether any work is done outside the UK. For example, a profitable UK subsidiary doing its own development usually claims the merged scheme expenditure credit, worth about 15 pence of tax for each pound of qualifying spend at the 25% main rate.
What we do for you
The right claim, by the right company, on each side of the Atlantic.
Project eligibility review
Your projects tested against the UK definition of R&D and the four part test for the US research credit.
Claimant analysis
Which company in the group is entitled to claim, based on who decides the R&D is done and who pays for it.
Qualifying cost schedule
Staff, software, cloud, data, consumables and contractor costs identified, with overseas costs checked against the UK rules.
Claim notification and AIF
The claim notification filed on time and the additional information form completed for HMRC.
UK claim in the CT600
The merged scheme or ERIS claim built into your corporation tax return, with the credit calculated correctly.
US Form 6765
The section 41 research credit calculated and claimed, with section 174 and 174A treatment applied to your research costs.
What clients say about our R&D work
UK claim protected before year end
Our UK team builds most of the product, but the US parent sets the roadmap. Taxule reviewed our intercompany contract against the merged scheme rules and changed it before year end so the UK company could still claim.
The wrong scheme avoided
We were about to claim ERIS until Taxule pointed out that our new US investor made us part of a larger group. Better to hear it before the claim than from an HMRC enquiry.
A claim we could defend
Half our testing was done by a contractor outside the UK. Taxule separated what still qualified from what did not and gave us a claim we were confident in.
How we work with you
Three stages, with the whole group in view from the start.
Map the research
We look at your projects, where the people doing them are based and which company funds and directs the work.
You get: a clear view of what qualifies and where.
Confirm who claims
We confirm the claimant, the scheme and the qualifying costs on each side, and file the claim notification if needed.
You get: no overlap between the UK and US claims, and no gaps.
Prepare and file
We prepare the UK claim and additional information form, the US Form 6765 and the supporting technical report.
You get: claims filed with the evidence to support them.
Why one team for both R&D claims
R&D in a US and UK group is one set of projects with two sets of rules. This is what changes when one team looks at both.
The R&D rules behind your claim
The rules that decide who claims and how much, explained in plain English.
One UK scheme for most companies
For accounting periods beginning on or after 01/04/2024, the SME scheme and RDEC were merged into one taxable expenditure credit of 20%.
CTA 2009, Part 3, Chapter 6AA separate route for intensive loss makers
Loss making SMEs whose R&D is at least 30% of total relevant spending can use ERIS, with an extra 86% deduction and a 14.5% payable credit.
CTA 2009, Part 13Group size follows the parent
SME status counts linked and partner companies. A small UK company owned by a large US group is not an SME for R&D purposes.
CTA 2009, section 1119The company that decides is the claimant
Under the merged scheme, relief for contracted R&D generally goes to the company that decides the work is done. A UK company doing research to order for its US parent may not be able to claim.
CTA 2009, Part 3, Chapter 6AMost overseas costs no longer qualify
Since April 2024, overseas contractor and outsourced worker costs are generally excluded, unless the work must be done abroad for reasons such as geography or law.
Finance Act 2024US research costs can be deducted again
From tax years beginning after 31/12/2024, US research costs can be deducted straight away under section 174A. Research carried out outside the US is still spread over 15 years.
IRC sections 174 and 174AYour R&D tax relief questions
Straight answers to what founders and finance teams ask us first.
What is the merged R&D scheme?
It is the UK R&D relief for accounting periods beginning on or after 01/04/2024. It replaced the separate SME scheme and RDEC with a single 20% expenditure credit.
Can a UK subsidiary of a US company claim R&D relief?
Often yes, under the merged scheme. It cannot use ERIS if the wider group is too large to be an SME, and it may not be able to claim for work its US parent commissions, so the intercompany contract matters.
Can I claim for developers based outside the UK?
Generally not for contractors and outsourced workers, since April 2024. There are narrow exceptions where the work has to be done abroad, such as for geographical or legal reasons.
Do I need to tell HMRC before I claim?
If it is your first claim, or you have not claimed in the previous three years, you must send a claim notification within six months of the end of the accounting period. Every claim also needs an additional information form.
Can the US company claim the research credit for work done in the UK?
No. The section 41 credit is only for research carried out in the US. UK research funded by the US company is also spread over 15 years for US tax.
How much does an R&D claim cost?
It depends on the number of projects and companies involved. After the free consultation, we agree the scope and fee with you in writing before any work starts.
Claim what your research is worth, on the right side of the border.
Tell us where your R&D happens and who funds it. We will map the claims you can make and the deadlines that apply.
