Can I claim R&D tax relief for website development?

Important: for accounting periods beginning on or after 1 April 2024, the previous SME and RDEC schemes no longer apply. Claims are made under the merged R&D tax relief scheme or, for eligible loss-making R&D-intensive SMEs, ERIS.  

What HMRC means by “R&D” for website projects

A lot of website work is valuable, but that does not automatically make it R&D for tax purposes. HMRC looks for projects that aim for an advance in science or technology and involve scientific or technological uncertainty that a competent professional could not readily resolve.  

In plain English, a qualifying website project is usually one where you are not just building pages or configuring a platform. You are doing systematic technical work to solve a problem that does not have an obvious, known solution.

The fine line: what usually does not qualify

Most standard website activity is not R&D. That includes rebrands, UI refreshes, content updates, routine CMS configuration, standard integrations, performance tuning using well-known methods, and building a typical marketing site or e-commerce site using established plugins and patterns.

If the work is mainly design-led or commercial (for example improving conversion rates, customer messaging, or checkout flow), it is unlikely to qualify on its own. HMRC’s focus is on genuine scientific or technological advances, not creative innovation or business improvement.  

When website development is more likely to qualify

Website development can be R&D where the “website” is really a piece of software engineering that pushes beyond routine development. Common triggers include:

‍1) New functionality with real technical uncertainty

Examples include building a new architecture to handle unusual scale or latency constraints, solving hard reliability problems, or creating a novel approach to data synchronisation across systems where established patterns do not work.

‍2) Complex systems integration where existing methods do not fit

Integrations are usually routine, but they can cross into R&D if you need to develop new middleware, protocols, or data handling approaches because the constraints are unusual (for example low trust data, real-time processing at high volume, or strict privacy constraints).

3) Advanced security, privacy, or compliance engineering

Security hardening is typically routine, but it can be R&D if you are developing new techniques to meet demanding requirements, such as privacy-preserving analytics, novel identity assurance flows, or new ways to detect abuse without harming legitimate customers.

4) AI and personalisation that requires new engineering to work reliably

Using an off-the-shelf model is rarely R&D. It can become R&D when you have to engineer new methods to make it accurate, safe, explainable, and performant in your environment, particularly where data, bias, monitoring, and governance are non-trivial.

A simple self-check before you invest time in a claim

If you are unsure, pressure-test the project with three questions:

• What was the technical goal, and what advance were you trying to achieve?
• What was uncertain, and why could a capable developer not just “look it up” and implement it?
• What did you do to resolve the uncertainty (testing, prototyping, experimentation, iterations)?

If you can answer those clearly, you may have a credible starting point for an R&D review.

Can you claim if a third party did the work?

Potentially, yes. Website R&D is often delivered with agencies, contractors, and specialist suppliers. Under the current rules, some subcontractor and externally provided worker costs can qualify, but eligibility depends on the contract structure and who is treated as undertaking the R&D.  

Two practical points matter:

• There are restrictions on certain overseas subcontractor and overseas worker costs, with limited exceptions. If the technical work is delivered outside the UK, you should check eligibility early.  
• Where a subcontractor is unconnected, the amount you can include is commonly restricted to 65% of the payment under HMRC’s rules.  

What costs can you claim for website and software R&D?

If the project qualifies, you still need to get the qualifying expenditure right. HMRC’s categories include staff costs, certain EPWs, certain subcontractor costs, consumables, and software, plus cloud and data costs used for R&D activities.

For web and software work, the most common qualifying costs are:

Staff costs

Salary, employer NIC and pension contributions for employees directly involved in the qualifying R&D, apportioned for the time spent.  

EPWs and subcontractors

‍Agency and subcontractor costs can qualify in some cases, often subject to caps and restrictions, including overseas limitations.  

Software, cloud and data costs

‍Software used directly in R&D, and cloud computing and data costs used for R&D activities (for example environments used for testing, modelling, simulation, or data processing).  ‍

How much are website and software R&D claims worth?

For accounting periods beginning on or after 1 April 2024, most companies claim under the merged scheme, which provides a taxable expenditure credit at a headline rate of 20% of qualifying R&D spend. Because the credit is taxable, the net benefit depends on your Corporation Tax position.  

Eligible loss-making R&D-intensive SMEs may instead qualify for ERIS, which uses a different calculation and can produce a stronger cash outcome in the right circumstances. The payable credit rate is 14.5% of the surrenderable loss, and the intensity condition is broadly 30% (subject to detailed rules).

‍Worked example: merged scheme (illustrative)

Assume qualifying R&D spend of £100,000.

• Gross credit: £100,000 × 20% = £20,000  
• The credit is taxable, so the net benefit will depend on your Corporation Tax rate and the claim payment steps.

If you want a quick indicative figure, use our R&D calculator. It provides an illustrative estimate only and is not a substitute for advice, especially where contracts, overseas delivery, group structures, or caps may apply.

Do not miss the admin steps and deadlines

Even a strong technical case can fail on process. Some companies must submit a claim notification before claiming, and all claims must include an Additional Information Form (AIF) before or at the point of filing the Company Tax Return, following HMRC’s submission rules.  

You also need to stay on top of the claim window. In many cases you have up to 24 months from the end of the period of account, with special deadlines for longer periods of account. Meeting the key deadlines is critical to a successful claim, use our handy tool to work out your personal deadline schedule.‍