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R&D Tax Credit Calculator

Estimate your UK R&D tax credit or relief. See potential savings under both SME and RDEC schemes.

Updated for 2025/26 tax year (April 2024 rates)

R&D Details

Staff costs, subcontractors, consumables, and software

SME: <500 employees, <€100m turnover. RDEC: larger companies or grant-funded R&D

Loss-making companies can claim cash credits under SME

Quick amounts:

SME Scheme Calculation

Qualifying R&D Expenditure£100,000
Enhanced Deduction (86%)£86,000
CT Saving @ 25%£21,500
Total Tax Benefit£21,500
Effective Benefit Rate21.5% of R&D spend

SME Scheme Explained

The SME scheme gives you an additional 86% deduction on qualifying R&D costs. This reduces your taxable profits, saving you corporation tax at your marginal rate.

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SME benefit: £21,500 (21.5%). RDEC would give you £15,000 (15.0%).

Disclaimer: This calculator provides estimates only based on standard rates. R&D intensive SMEs (30%+ R&D costs) may qualify for higher credit rates. Actual claims depend on HMRC approval of qualifying activities. Consult a specialist R&D tax advisor for accurate calculations.

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Understanding UK R&D Tax Credits in 2025/26

R&D tax credits are a valuable government incentive designed to encourage UK companies to invest in innovation. If your company is working on projects that advance science or technology, you could be entitled to significant tax relief or cash payments.

The Two R&D Schemes

There are two main R&D tax credit schemes in the UK, and the one you can claim depends on your company's size:

  • SME Scheme — For companies with fewer than 500 employees and either turnover under €100 million or a balance sheet under €86 million. Offers an 86% enhanced deduction on qualifying R&D costs.
  • RDEC (Research and Development Expenditure Credit) — For larger companies or SMEs that have received notified state aid for their R&D. Provides a 20% above-the-line credit.

How SME R&D Relief Works

Under the SME scheme, you can claim an additional 86% deduction on qualifying R&D expenditure. For a profitable company paying the 25% corporation tax rate, this translates to a 21.5% effective benefit on your R&D spend.

For loss-making companies, the benefit is even more immediate: you can surrender your enhanced losses for a cash credit. The total surrenderable loss equals your original R&D spend plus the 86% enhancement, and you receive 10% of this as cash.

How RDEC Works

RDEC provides a 20% tax credit that appears above the line in your accounts, boosting your reported profit. The credit is taxable, so profitable companies receive a net benefit of 15% after paying 25% corporation tax on the credit. Loss-making companies can receive the full 20% in cash after offsetting any tax liabilities.

What Costs Qualify?

Qualifying expenditure typically includes:

  • Staff costs (salaries, NI, pension) for employees working on R&D
  • Subcontractor costs (65% for SME, 100% for RDEC)
  • Consumables used in R&D (materials, utilities)
  • Software licenses used in R&D activities
  • Payments to clinical trial volunteers

Disclaimer: This calculator provides estimates based on standard rates. R&D tax credits are complex and depend on HMRC accepting that your activities qualify. We recommend working with a specialist R&D tax advisor to prepare and submit your claim.

Frequently Asked Questions