AIM companies: R&D compliance is crucial for investor confidence
For companies listed on the Alternative Investment Market (AIM), high-growth businesses, and companies more broadly, research and development (R&D) tax relief represents a valuable source of funding. However, HMRC has adopted a stricter approach to compliance, and under the new rules, errors or delays in claims can have a direct impact on investor confidence.
With investor caution increasing and HMRC enquiries becoming more rigorous, AIM companies must ensure that their R&D claims are accurate, defensible, and aligned with the latest HMRC guidelines.
Why investor confidence depends on R&D compliance
Investors expect certainty and transparency. For AIM-listed and high-growth companies, an ongoing HMRC enquiry into an R&D claim can create uncertainty that directly impacts critical business activities such as fundraising, refinancing, or acquisitions. The presence of unresolved tax issues may lead to transaction delays, increased scrutiny during due diligence, or downward pressure on valuations.
Robust R&D compliance and governance processes are therefore essential. Demonstrating that claims are well-prepared, evidence-based, and aligned with HMRC’s evolving requirements provides assurance that financial information is reliable and that tax-related risks are being effectively managed. For investors, this signals that management has control over both compliance and cashflow, reducing the likelihood of unexpected liabilities or reputational issues. In practice, this can improve deal certainty, support stronger valuations, and maintain investor confidence during growth or exit events.
What has changed in the R&D tax relief landscape?
New regimes from April 2024
Two new schemes have replaced the previous SME and RDEC reliefs:
- Enhanced R&D Intensive Scheme (ERIS): Designed for loss-making SMEs with high levels of qualifying R&D spend. Where thresholds are met, cash benefits can be more generous.
- Merged Research and Development Expenditure Credit (RDEC): Applies to all other claimants, offering a taxable above-the-line credit at a net benefit of around 15 percent of qualifying expenditure.
Wider eligible costs
From April 2023, the scope of relief has broadened to include data licences and cloud computing services that directly support qualifying R&D activities.
New reporting requirements
Since August 2023, businesses must submit a digital Additional Information Form (AIF) alongside their claim. This requires significantly more detail, increasing the administrative burden.
Advance notification deadlines
In some cases, businesses now need to notify HMRC of their intention to claim within six months of the year-end. Missing this deadline could mean losing entitlement to relief.
Practical steps for AIM companies
1. Strengthen governance and evidence
Keep detailed, contemporaneous records of your R&D activities and costs. Good documentation not only supports compliance but also helps give investors confidence in your governance standards.
2. Coordinate across departments
Finance, tax, and technical teams need to work together to ensure claims meet the new HMRC requirements. This is particularly important where projects involve contracted-out R&D or overseas activities.
3. Integrate notification into your processes
Make sure claim notification deadlines are embedded in your year-end timetable so they are not overlooked.
4. Work with trusted advisers
Partnering with a reputable R&D tax adviser adds credibility to your claim. It also helps you prepare for potential HMRC scrutiny and ensures that claims are filed accurately and on time.
For practical tips on preparing strong claims, see our guide to avoiding common R&D tax relief pitfalls.
We are here to help
For AIM companies, R&D compliance is not just about securing relief. It is also about safeguarding investor confidence, maintaining credibility in the market, and keeping transactions on track. With HMRC applying increased scrutiny and new rules now in force, businesses should act early to strengthen processes, prepare robust claims, and seek professional support where needed.
We have supported many businesses with the full claim process, making sure they are fully complying with all HMRC requirements and making their case as robust as possible. If you are considering an R&D claim or have encountered issues with one you are in the midst of trying to process, please get in touch with our specialist R&D Tax Relief team.