Today’s Budget has brought some welcome news for companies claiming Research and Development (R&D) tax relief, with the Government announcing the removal of the Claim Notification Form (CNF) and plans to simplify the Additional Information Form (AIF).
There are no changes to the rates of R&D tax relief or the underlying qualifying criteria. Instead, the focus is on reducing administrative burdens and making the claims process more straightforward for businesses.
Claim Notification Form to be abolished from April 2027
Perhaps the most significant announcement is that the Government will remove the requirement to submit a Claim Notification Form for R&D claims made on or after 1 April 2027.
Introduced in 2023, the CNF requires certain businesses, including first-time claimants and those that have not claimed in the previous three years, to notify HMRC of their intention to claim R&D tax relief within six months of the end of their period of account.
Failure to meet this deadline invalidates an otherwise legitimate claim, regardless of whether the company has undertaken qualifying R&D activities.
In our discussions with businesses, we have encountered several companies that were entirely unaware of the notification requirement. For some, this has meant discovering that they could no longer claim relief for genuine R&D expenditure simply because an administrative deadline had passed.
The Government has acknowledged that a number of companies were submitting notifications they did not need to and that levels of error and fraud have reduced.
Removing the CNF is therefore a sensible step towards making R&D tax relief more accessible without changing the underlying eligibility requirements.
Importantly, the current notification rules remain in force for claims made before 1 April 2027. Companies whose notification window closes before then should continue to notify. Depending on the transitional rules, companies that missed a notification deadline may be able to claim for some earlier periods once the change takes effect, provided the normal time limit for making the claim has not passed. It is not yet clear whether this will extend to claims already removed by HMRC for want of a notification. However, we are waiting for the detailed transitional provisions to be published.
Additional Information Form to be simplified
The Government has also confirmed plans to simplify the Additional Information Form from autumn 2027.
The AIF, introduced in August 2023, requires businesses to provide detailed information about their R&D projects and qualifying expenditure before submitting a claim.
HMRC intends to work with stakeholders and software providers to:
- Reduce unnecessary duplication and disproportionate information requests.
- Improve questions concerning contracting arrangements and externally provided workers.
- Provide greater clarity on the information required about R&D projects.
- Clarify the expenditure intensity ratio for companies claiming Enhanced R&D Intensive Support (ERIS).
The AIF itself is not being abolished, and businesses will still need to demonstrate that their activities and expenditure qualify for relief. With the CNF gone, the AIF becomes HMRC’s first detailed view of a new claimant. We would expect it, along with HMRC’s checks after a claim is submitted, to carry more weight in how claims are risk assessed, particularly for first-time claimants.
HMRC has invited practical suggestions on the AIF through its R&D policy mailbox, and we will be feeding in the experience of the businesses we work with.
A wider review of R&D legislation and the claims process
Beyond the immediate changes, the Government has committed to reviewing the R&D claims process from start to finish and seeking views on simplifying the legislation (opens in new tab).
HMRC’s R&D Policy Team also told members of its R&D Consultative Forum today that areas already identified for consideration include the ERIS expenditure intensity ratio, the PAYE and National Insurance cap exemption and the treatment of companies whose going concern status changes for technical reasons.
These are areas where complex rules can create uncertainty for businesses. We welcome the opportunity for practical issues experienced by claimants to be considered as part of the review.
HMRC’s targeted R&D advance assurance pilot, launched in May 2026, is also being evaluated, with the future of advance assurance to be considered after the pilot concludes in May 2027. HMRC’s existing advance assurance service for first-time SME claimants remains available.
Around 40,000 businesses expected to benefit
According to HMRC’s published impact assessment (opens in new tab), approximately 40,000 businesses each year are expected to be affected by the changes to the CNF and AIF.
The Treasury estimates the changes will cost £45 million in 2027-28, rising to £70 million a year by 2031-32, largely reflecting an expected increase in claims from first-time claimants.
In other words, the Government expects more businesses to claim once the notification requirement is removed. That is a clear acknowledgement that the existing administrative requirements have been preventing some businesses from accessing relief.
New Founders’ Relief could benefit innovative businesses
The Budget also introduces proposals for a new Capital Gains Tax Founders’ Relief, offering a 10% tax rate on up to £10 million of qualifying lifetime gains from 6 April 2027.
To qualify, a company would need turnover of at least £10 million and at least 15 full-time equivalent employees, among other conditions. It would also need to meet two of three growth and innovation tests. One of those tests requires at least £1.5 million of qualifying R&D expenditure, with R&D tax relief claimed for that expenditure within the three years before disposal.
Although separate from the R&D tax relief scheme, the proposal creates a further link between a company’s R&D activity, its claim history and the potential tax position of its founders. A claim that is not made, or does not stand up to scrutiny, could affect a founder’s ability to qualify.
The detailed conditions remain subject to consultation (opens in new tab), which closes on 30 November 2026.
What happens next?
The Government intends to legislate for the removal of the CNF in Finance Bill 2026-27 (opens in new tab). The AIF changes will be made through regulations, with further details to follow before autumn 2027.
There are also wider changes to tax compliance procedures planned for April 2028, including a new duty to correct errors and the introduction of Customer Correction Notices. These will allow HMRC to ask a company to check its position and either correct an error or explain why no correction is needed, and are likely to be relevant to R&D claims.
For now, businesses should continue to follow the existing R&D claim procedures, retain appropriate supporting evidence and ensure that all relevant deadlines are met.
Our view
Overall, today’s announcements represent a positive development for R&D tax relief claimants.
Jonathan Yeomans, founder of RD Reliance and a former HMRC Senior Tax Inspector, said: “We have been approached by genuine claimants who have lost the ability to claim because of a deadline they didn’t know existed. Removing the notification form fixes that from April 2027.”
He added: “There must, of course, be safeguards to protect the integrity of the R&D tax relief system, but they should be proportionate and should not create unnecessary barriers for genuine claimants.”
The planned simplification of the AIF and the wider review of R&D legislation are encouraging. Their success will depend on how the changes are implemented in practice.
For businesses investing in innovation, a clearer and more accessible R&D tax relief system is good news.
Unsure where you stand?
If you are planning an R&D claim and are not sure whether a notification is still needed, or how the Budget changes affect you, we are happy to talk it through. Book a call