That was the year that was…
Paul Rosser looks back on the changing R&D landscape in 2025, with particular attention on what some football clubs have been up to…
In relation to legislative changes, 2025 has been a relatively quiet year for R&D tax relief. This has been very welcome as, following a few years featuring many dramatic changes to the schemes, we all needed some time to get used to the new state of play.
That’s not to say that the changes in previous years didn’t have a big impact during 2025, as some of them only started to be applicable to companies claiming R&D tax relief during this year.
The first and most noticeable change was that the old SME and RDEC R&D schemes had now been replaced with the new Merged and ERIS(Enhanced R&D Intensive Support) schemes for any accounting period starting on or after 1 April 2024.
Whilst the ERIS scheme offers a benefit of up to 27% it’s only available to loss-making companies spending 30%-plus of their total relevant expenditure on R&D. So, the vast majority of R&D claims will be made under the Merged scheme, which only offers 15%–16.2% in terms of benefit. For companies used to receiving 25%-33% before the SME rates were cut in 2023, this came as quite a big decease, with many now deciding it simply wasn’t worth submitting an R&D claim anymore.
In addition, overseas subcontractor costs are now mainly disallowed under both the merged and ERIS schemes, which is another blow to claimants, especially startups who often use overseas developers to carry out their R&D to keep their costs down.
During 2025 we were also still dealing with the issues caused by the Claim Notification Form (CNF), which had come into force for any accounting period starting on or after 1 April 2023.
The introduction of the CNF meant that many companies seeking to claim R&D tax relief were required to notify HMRC of their intent to claim no later than six months after the accounting period end. Failure to do so would mean the rejection of any claim submitted.
Touted as a way to prevent abuse of the R&D tax relief system by dishonest advisors, who would often approach non-qualifying companies and convincethem to submit R&D claims for their historic accounting periods, the CNF made some sense. However, the way in which it was implemented did not, as the legislation also included an exemption from having to submit a CNF for companies that had claimed R&D tax relief in the past, subject to some conditions.
It was the rules around when a company doesn’t need to submit a CNF that caused most of the issues, with even HMRC not always understanding them correctly – the guidance it issued in September 2024, via CIRD183000, was subsequently discovered to be wrong.
With hindsight, perhaps a blanket requirement for all companies to submit a CNF by their tax return filing date would have been easier to implement, and for people to understand.
Due to the CNF, the drop in benefit and the higher risk of a compliance check following HMRC’s increased compliance activity in relation to R&Dclaims, it was no surprise that the stats released in 2025 showed a drop in the number of SMEs claiming R&D tax relief of 31%, during the 2023/24 period, with a further reduction expected when the figures for 2024/2025 are released next year.
During 2025, we also saw several news stories related to R&D tax relief. One published by The Times in February claimed that at least 28 football clubs had made R&D claims worth a total of £13 million of taxpayers’ money.
Whilst there was nothing preventing a football club from claiming R&D tax relief, and some will be undertaking qualifying work in fields such as medical and nutritional science to allow their players to perform better, it was the fact that a relatively small club, Dundee United, had received £1.27 million during 2022 from R&D claims made for its 2021 and 2022 periods, which raised a few eyebrows among R&D advisors.
When The Times reported, aside from speculation that Dundee United’s R&D claims were likely over inflated, there wasn’t any actual evidence of any wrongdoing. That was until, in July, Tax Policy Associates (TPAL) obtained and published in full a copy of some claim documentation for Dundee United’s 2022 R&D claim, which had been signed by both Dundee United and its R&D advisor, ZLX. ZLX, as you might remember, featured in another article we published in the February-March 2025 edition of this magazine, headlined ‘Out in the cold’. This was in relation to a court case where ZLX attempted to sue a former client, James Mackie Wholesale, for refusing to submit an invalid R&D claim related to a simple fridge installation.
The Dundee United claim document published by TPAL contained some quite concerning information, not least that it had claimed 80% of its chef’s wages,and 24% of its total players’ salaries, as qualifying R&D expenditure. Details of three projects were also included, with the main one claiming to be a collaboration between the club and Abertay University. However, in a subsequent Freedom of Information (FOI) request made to the university by the journalist Paul Malik, it confirmed that it held initial talks with Dundee United in 2022, but these ended without any projects being undertaken between the two parties.
After The Times released its story regarding football clubs claiming R&D tax relief, HMRC confirmed that it had opened compliance checks into 33 clubs’ claims, with a total combined value of around £17million. Dundee United released a statement in August stating that it was in constructive dialogue with HMRC in relation to at least one of the R&D claims it had made.
Away from the football pitch, we saw most of the companies which made up the Green Jellyfish network enter liquidation, with the main entity, GJ2020 Limited, going into administration, all handled by Quantuma Advisory. This wasn’t that surprising as, following a series of articles published by Dan Neidle, via TPAL in August of 2024, the Green Jellyfish network was raided by HMRC on suspicion of tax fraud and anti-money launderingoffences, with 11 people being arrested. At the time of writing, no update has been provided by HMRC regarding its investigation into Green Jellyfish, but as this is a complicated case it may be some time before any publicly visible action is taken.
As we reached the end of 2025, the Autumn Statement confirmed that HMRC will be running a voluntary pilot of its new advance clearancescheme for R&D claims in Spring of 2026. Which should be good news for SMEs who have been put off claiming due to the higher possibility of a long-running, painful compliance check.
• With thanks to Paul Rosser who is the founder of R&D Consulting Ltd and is the owner of this article.