Quick answer: R&D tax relief covers the R&D costs HMRC lists as claimable, which exclude capital expenditure. Capital expenditure on R&D can instead qualify for R&D allowances at 100%, and other equipment for plant and machinery allowances. Both can apply to one company in one period. Sourced to HMRC guidance, checked 27 October 2026.
Facts checked 27 October 2026. Sources: HMRC merged scheme guidance, HMRC R&D costs you can claim, HMRC claim capital allowances, Capital Allowances Manual CA60100, CA60300, ForrestBrown, Leyton UK.
How the two reliefs differ, in HMRC's words
R&D tax relief rewards qualifying R&D costs. HMRC says the merged scheme “is a taxable expenditure credit” and that “The rate of R&D expenditure credit under the merged RDEC scheme is 20%” (merged scheme guidance, last updated 8 January 2026, checked 27 October 2026). Loss-making R&D intensive SMEs can instead use enhanced R&D intensive support; see R&D advisers for ERIS claims.
The costs claimable are listed on HMRC's page on R&D costs you can claim, which says “You can only claim the costs listed on this page” and gives as examples of what you cannot claim: “capital expenditure” and “the cost of land”.
Capital allowances are a separate relief. HMRC says: “Capital allowances are a type of tax relief for businesses. They let you deduct some or all of the value of an item from your profits before you pay tax.” (Claim capital allowances, checked 27 October 2026). The same page lists research and development among the “other capital allowances”.
At a glance
| Criterion | R&D tax relief (merged scheme) | R&D allowances (RDA) | Plant and machinery allowances |
|---|---|---|---|
| What it covers | The R&D costs HMRC lists as claimable. Capital expenditure is not among them | Capital expenditure on R&D incurred by a trader | Equipment, machinery and business vehicles |
| Form of relief | A taxable expenditure credit at 20% | Allowances at a rate of 100% | Annual investment allowance (up to £1 million), first-year allowances, writing down allowances |
| Who can claim | Trading companies chargeable to Corporation Tax with a project that meets the definition of R&D | Traders only. A profession or vocation is not entitled | Businesses with qualifying plant and machinery |
| Official source | HMRC merged scheme guidance, R&D costs you can claim | CA60100 | Claim capital allowances |
R&D allowances: the capital side of R&D
HMRC’s Capital Allowances Manual says: “RDA gives relief for capital expenditure on research and development incurred by a trader. Allowances are only due if the research and development is related to the trade that the trader carries on.” It adds: “The allowances are very generous because the rate is 100%.” and “RDA is only available to traders. A person carrying on a profession or vocation is not entitled to them.” (CA60100, checked 27 October 2026).
On what counts, CA60300 says expenditure on R&D “includes expenditure incurred for carrying out research and development, and expenditure incurred for providing facilities for carrying out research and development”. Its example is a laboratory: the cost of buying the laboratory “but not the land on which it stands” counts. It excludes expenditure on acquiring rights (such as patent rights) and on dwellings (with a limited exception). For what counts as R&D for allowances, see CA60200.
Plant and machinery allowances
HMRC lists the types on Claim capital allowances: the annual investment allowance (“you can claim up to £1 million on certain plant and machinery”), 100% first-year allowances, full expensing and a 50% first-year allowance for qualifying investments from 1 April 2023, a 40% first year allowance for qualifying plant and machinery purchased after 1 January 2026, and writing down allowances. It also says: “If an item qualifies for more than one capital allowance, you can choose which one to use.” Rates and eligibility change, so read the page itself before you rely on this summary.
Can you claim both?
They are different reliefs for different kinds of cost, so the same company can have both in one period. What HMRC’s guidance does not allow is claiming a capital item as R&D tax relief: capital expenditure is not a claimable cost for that relief, and R&D capital expenditure is dealt with through allowances. Our earlier version of this page suggested a machine’s cost could also generate an R&D tax credit; that is not what HMRC’s cost list says, and we have removed it. How a particular purchase is split between the claims is a question for a qualified adviser.
Who offers capital allowances?
This page compares reliefs, not adviser fees, so there is no fee table. Of the advisers we checked, two state that they offer capital allowances.
| Adviser | Capital allowances offered | Companies House |
|---|---|---|
| ForrestBrown | Yes (source, checked 27 October 2026) | Active, company number 08004376, last accounts made up to 31 December 2025 (Companies House, checked 27 October 2026) |
| Leyton UK | Yes (source, checked 27 October 2026) | Active, company number 06977112, last accounts made up to 30 June 2025 (Companies House, checked 27 October 2026) |
| Uplift Tax (introducer) | Not confirmed. We have not confirmed whether the specialist we introduce you to handles capital allowances; ask before you rely on it | Blue Llama Ltd (trading as Uplift Tax), company number 12642550 |
Where a firm is not listed, the sources we checked do not say; that does not mean it does not offer them. Ask each adviser which reliefs they handle and who does the work.
Why there is no fee example here
R&D tax relief and capital allowances are different reliefs with different advisers and fee bases, so a single worked fee example would mislead. For fee examples see our adviser comparisons, for instance Uplift Tax vs EmpowerRD, and how our fees work.
How Uplift Tax works
Uplift Tax is an introducer. The specialist pays us a share of its fee. You do not pay Uplift Tax anything. We introduce you to an HMRC-registered specialist for R&D tax relief. Whether that specialist also handles capital allowances is not confirmed here; ask. See how it works, capital allowances and capital expenditure in R&D in our glossary, and specialist vs accountant.
Company facts
- ForrestBrown: FORRESTBROWN LIMITED, incorporated 23 March 2012, number 08004376, status Active (Companies House, checked 27 October 2026).
- Leyton UK: LEYTON UK LIMITED, incorporated 30 July 2009, number 06977112, status Active (Companies House, checked 27 October 2026).
- Uplift Tax: Blue Llama Ltd (trading name Uplift Tax), company number 12642550.
Checked 27 October 2026. See all comparisons and the calculator.