Which company claims, and what connected means.

Generally, the company that carries out the R&D, or that decides it needs doing where the work is contracted out and can evidence that decision. The employing company, the one that pays the costs and the one with the profits may be different. We map who does what, who pays whom and who decides, then work out which company or companies should claim.

The 30% test compares relevant R&D expenditure with total relevant expenditure, and connected companies' expenditure is brought into both figures, while payments to connected companies are excluded from the total. A company that looks intensive alone may not be as part of a group, or the reverse. We calculate it both ways and check the overlapping periods.

Under the merged scheme, the order of use includes an optional surrender of the expenditure credit to another group company. This lets the group use the credit where there is tax to relieve. It is a choice with consequences for both companies, so we model it before anything is filed, along with the payment between them.

It depends what they are. If a connected company supplies workers, or carries out R&D for the claimant, the claimable amount is the lower of the payment or the provider's relevant costs. Unconnected providers' costs are taken at 65%. A general management recharge is not automatically R&D. We look at what was actually provided and how the charge was calculated.

The PAYE cap does not apply to a company creating or managing its own IP, with the work wholly or mainly done by its employees, provided costs of connected-party workers and contractors are no more than 15% of qualifying expenditure. In a group that uses a shared service company, that test can be failed without anyone noticing. We test it at the start.

It can do either. A holding company that does no R&D does not claim, but it can change who employs the staff, where the IP sits and how group surrender and the connected-party tests work. A structure designed for other reasons may leave the R&D in the wrong place. We review the structure from the R&D point of view.

Yes. For periods beginning on or after 1 April 2024, contracted-out R&D and externally provided worker costs qualify only if the work is done in the UK or is qualifying overseas expenditure, a strict test where cost and availability of workers are ignored. Work done by an overseas group company is not exempt because it is in the same group. We check where each piece of work was done.

The R&D rules use the Corporation Tax definition of connected persons, which is set out in legislation and applies to relationships of control and common ownership. We do not rely on a loose reading. For each group, we check the test against the actual shareholdings and control, because the answer drives the intensity test, the cost rules and the PAYE cap exemption.

Each company claims for its own period of account, so costs are allocated to the period in which the company incurred and paid them. Where periods differ, we align the data company by company, and take care with the intensity test, where connected companies' figures for overlapping periods are brought in. We agree a data timetable with the group finance team.

It can. The three-year test looks at whether the claiming company itself has made an R&D claim, and the rules give no credit for claims by other group companies. So a newly formed company that will claim, such as a new company taking over the R&D, must notify even if its sister companies claim every year. A holding company that does no R&D does not claim at all.

Eligibility is looked at company by company. A loss-making R&D-intensive SME in the group may qualify for ERIS, while a profitable company claiming for its own R&D uses the merged scheme. Within a company, the same costs cannot go under both. We model each company and the group result before choosing.

Payments between group companies for surrendered expenditure credit, up to the amount surrendered, are ignored for Corporation Tax and are not distributions, for payments made on or after 26 November 2025 under Finance Act 2026. That makes the commercial arrangement simpler. We make sure the amount paid, the surrender and the accounting all agree.

A claim belongs to the company that made it, and the time limits and enquiry window run from that claim. A reorganisation can change who holds the records and who answers HMRC's questions, which matters if an enquiry comes. We secure the evidence and the people before a reorganisation, where we can.

The cap is a formula: £20,000 plus 300% of the company's relevant PAYE and NIC liabilities, with the £20,000 reduced for short periods. It is calculated for each claimant company. A connected company's PAYE and NIC is added only where it supplies externally provided workers or carries out contracted-out R&D for the claimant, and only the part attributable to that work (section 1112C). The IP exemption is tested separately.

Each company is responsible for its own return, and the additional information form names a senior internal contact for that company, such as a director. Every claim we prepare is reviewed and signed off by a Chartered Tax Adviser, with the group picture in view. Every agent who advised is named on each company's forms.

Full claim advance assurance is for first-time SME claimants where no group company has claimed before, with turnover below £2m and fewer than 50 employees. A group where any member has claimed does not qualify. The targeted advance assurance pilot is open to any SME, not only first-time claimants, for up to two areas.

A group structure chart, which companies employ the technical staff, who contracts with whom, any intra-group service agreements, the accounting periods of each company, and which companies have claimed before. We ask for little at first, so that nobody has to gather everything before we have spoken, and we tell you what else is needed after the scoping call.