How Does Budget 2026 Impact R&D Tax Credits?

If you were braced for a cut to R&D tax credits in the Budget on 28 October 2026, you can relax a little. The rates for the merged scheme and ERIS haven't changed, but the paperwork around making a claim has.

Two of the forms HMRC introduced in 2023 are being reworked. The claim notification form goes for claims made from 1 April 2027, and the Additional Information Form (AIF) will be simplified from autumn 2027. Further details were circulated to R&D Communication Forum members beyond what was announced in the Autumn Budget.

Here's what's been announced, what hasn't, and what to do in the meantime.

What's changed for R&D claims in Budget 2026?

The Treasury's overview of tax legislation and rates for Budget 2026 announced two changes to the R&D tax scheme, aimed at making claims easier to submit. The rest of the scheme stays the same.

There is also an increase to capital allowances rates, which could be relevant to R&D relief claimants.

These updates are part of an easing up of the compliance measures introduced since fraud and error rates were first investigated. With the education efforts and the changes that required stronger support for a claim at the time of submission, HMRC are now feeling confident in the quality of claims submitted.

After a decrease in small claims, potentially due to the administrative burden introduced, as well as the weeding out of ineligible claims, the government has rededicated itself to promoting UK innovation. The risk of spurious claims has come down far enough to ease the barriers to entry for smaller claimants.

Are R&D tax credit rates changing?

No. The published tax measures don't include any change to the merged scheme or to ERIS. The merged scheme still gives a 20% taxable expenditure credit, worth around 15% net to a profitable company paying Corporation Tax at the 25% main rate. ERIS still offers loss-making, R&D-intensive SMEs a net benefit of up to 27%.

Corporation Tax rates are steady too. The Treasury has confirmed the main rate stays at 25% and the small profits rate at 19%. Because your net benefit depends on the rate your company pays, that keeps the maths of a claim predictable.

What is happening to the claim notification form?

The government is going to legislate in Finance Bill 2026-27 to remove the requirement to submit a Claim Notification Form (CNF) for R&D claims made on or after 1 April 2027. You may know this form as the Advance Notification Form (ANF).

Today, first-time claimants, and companies that haven't made a valid claim in the last three years, have to submit it within six months of the end of their period of account, or the claim is invalid. Our guide to the claim notification form covers who that applies to.

Removing it takes one deadline off first-time claimants' to-do lists, which makes it the most practical change in the announcement. It isn't law yet, and HMRC has confirmed that claimants and agents must keep pre-notifying claims until the requirement is removed.

The change also turns on when a claim is made, not when your accounting period ended. That difference matters:

Company A has a 30 June 2026 year end and has never claimed R&D tax relief before. Its notification deadline is 31 December 2026, which falls before 1 April 2027. The announcement suggests a claim made after 1 April 2027 won't need the form, but the requirement stays in force until then, so Company A should still submit the ANF by 31 December.

Until the Finance Bill passes and HMRC updates its guidance, treat your existing deadline as live. Submitting a form you turn out not to need takes a few minutes; missing one you did need invalidates the claim.

What is happening to the Additional Information Form?

From autumn 2027, the government will "simplify and rationalise" the information required in the Additional Information Form. HMRC has since said the changes will reduce unnecessary duplication, improve the information requested on contracting and externally provided workers, and give greater clarity on project information and the ERIS intensity ratio. The form itself isn't being scrapped, so every claim still needs an AIF submitted before your Company Tax Return.

HMRC uses the AIF as part of its risk assessment of each return, so a vague answer can still draw attention to your claim. A more streamlined form should be quicker to complete, and a clear, specific project description is still what makes a claim easy for HMRC to follow.

What hasn't the Budget changed?

The published measures don't touch what counts as qualifying R&D, how costs are calculated, or the rules for subcontractors and overseas costs. They also don't make claims less likely to be checked. The Budget funds a further 670 HMRC compliance officers across the tax system, so compliance checks are not going away. Keep your project records, timesheets and cost workings in good order, whichever forms you're asked to file.

Is anything else in the Budget relevant to R&D claimants?

First, the capital allowance changes in the table apply to main-rate expenditure, and R&D capital allowances work separately, so check your position before assuming either way.

Second, amended Company Tax Returns will have to be filed online from 1 April 2028, which is worth knowing if you're planning to add an R&D claim to an earlier return. HMRC has also outlined wider plans for R&D claims, which we cover next.

What else has HMRC said about R&D claims?

In its post-Budget update to R&D Communication Forum members, HMRC said it will look at the R&D claims process end to end, aiming to cut unnecessary burdens while keeping the safeguards it needs. It also wants views on simplifying the R&D legislation itself, as part of the Budget's Corporate Tax Simplification for Business Investment work. Three areas are already on the list:

• The ERIS intensity ratio, where the definition of total expenditure and the aggregation rules are complex
• The PAYE/NIC cap, where the exemption meant to support smaller, growing businesses doesn't always apply
• Going concern status, which a company can lose for technical reasons even when a viable trade continues.

The targeted advance assurance pilot, launched in May 2026, is still open for applications.

Key takeaways

• Rates are unchanged. The merged scheme and ERIS stay as they are, so the value of a claim hasn't moved.
• The claim notification form is going. It depends on Finance Bill 2026-27 passing, and it applies to claims made from April 2027, not to accounting periods.
• The AIF stays, but gets simpler. Expect a more streamlined form from autumn 2027, with less duplication and clearer guidance on contracting and externally provided workers.
• More simplification may follow. HMRC is gathering views on the ERIS intensity ratio, the PAYE/NIC cap and going concern status.
• Keep to the current rules for now. If a notification deadline falls before the legislation is in place, submit the form.
• Good records still keep claims straightforward. Clear project descriptions and a clean cost trail make a claim easy to submit, whichever forms HMRC asks for.

If you'd like help working out whether a notification deadline applies to your company, or you're preparing a claim ahead of these changes, get in touch and we'll walk you through it.