R&D Tax Credit Estimator
Estimate your R&D tax credit under HMRC's merged scheme (accounting periods beginning on or after 1 April 2024). The standard rate is a 20% taxable credit; loss-making R&D-intensive SMEs (30%+ of total expenditure on qualifying R&D) can instead claim ERIS, worth up to ~27p per £1 of qualifying spend. This is a directional estimate only.
R&D Tax Credit Estimator
Estimate your R&D tax credit under HMRC's merged scheme (accounting periods beginning on or after 1 April 2024). The standard rate is a 20% taxable credit; loss-making R&D-intensive SMEs (30%+ of total expenditure on qualifying R&D) can instead claim ERIS, worth up to ~27p per £1 of qualifying spend. This is a directional estimate only.
All expenditure for the year. Used to test R&D intensity.
Gross salary + employer NI + pension for staff doing qualifying R&D, apportioned.
UK subcontractor invoices for R&D work. HMRC allows 65% of each unconnected payment; modelled here on the total.
Materials, prototypes, items consumed in the R&D process.
Software licences and cloud costs used for qualifying R&D work.
Directional estimate only. ERIS applies only to loss-making SMEs; profit-makers claim the 20% merged credit instead. Net benefit assumes the 25% main CT rate (19% small-profits payers keep ~16.2p per £1). Does not model the PAYE-NI cap, contractor restrictions in detail, or consumables/software apportionment rules. Get a scoping call for an accurate claim.
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How R&D tax credits work
Under the merged RDEC scheme (accounting periods beginning on or after 1 April 2024), companies get an above-the-line credit of 20% on qualifying expenditure. The credit is taxable income, so the net benefit is roughly 15p per £1 of qualifying spend at the 25% main corporation tax rate, or about 16.2p at the 19% small-profits rate.
Loss-making R&D-intensive SMEs (where qualifying R&D is 30%+ of total spend, lowered from 40% for accounting periods beginning on or after 1 April 2024) can instead claim ERIS: an extra 86% deduction plus a payable credit of 14.5% of the surrenderable loss, worth up to ~27p per £1 of qualifying spend. 27% is not a credit rate applied to your costs.
Qualifying expenditure includes staff time on R&D, 65% of each unconnected subcontractor payment, consumables and software/cloud used for R&D. Actual claims involve detailed scoping and HMRC-specific rules not fully modelled here.
Frequently asked questions
- What is the merged RDEC scheme?
- For accounting periods beginning on or after 1 April 2024, HMRC merged the SME and RDEC schemes into a single scheme for most companies. The headline rate is a 20% above-the-line credit on qualifying expenditure. Loss-making R&D-intensive SMEs (30%+ intensity) can instead claim ERIS: an 86% extra deduction plus 14.5% of the surrenderable loss, worth up to ~27p per £1 net.
- Why is only 65% of subcontractor cost claimable?
- HMRC restricts claims to 65% of each unconnected UK subcontractor payment. For overseas subcontractors the rules are different and generally more restrictive.
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