R&D tax credits calculator UK

Are you investing in the development of new products and services? If so, you’re likely eligible for R&D (research and development) tax credits. However, many businesses do not know that they qualify for R&D tax credits, or that you can claim for up to two years prior to the date of your claim.

Think you could be eligible? Use our simple R&D tax credits calculator to see how much you could receive as a cash refund or to offset your tax liability.

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This calculator and the figures displayed are for illustrative purposes only. Actual eligible claim amounts may differ depending on a number of factors.

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The new R&D tax relief rates

The table below shows how R&D tax relief rates have changed in recent years. The merged scheme applies for accounting periods beginning on or after 1 April 2024.

Company type	SME R&D tax incentive		RDEC		Merged scheme	Enhanced R&D intensive support
	Before 1 April 2023	After 1 April 2023	Before 1 April 2023	From 1 April 2023	From 1 April 2024	From 1 April 2024
Loss-making SME	Up to 33.35%	Up to 18.6%	10.5%	15%	16.2%
Profit-making SME	Up to 24.7%	Up to 21.5%	10.5%	Up to 16.2%	Up to 16.2%
R&D intensive SME		Up to 27%				Up to 27%
Large company			10.5%	Up to 16.2%	Up to 16.2%

Steps to calculate R&D tax credit:

Identify Qualifying Expenditure:
- Staff costs: Salaries, wages, employer NIC, pension contributions, etc.
- Software costs: Software directly used in R&D.
- Consumables: Materials and utilities used up during R&D.
- Subcontractor costs: Payments to subcontractors for R&D activities.
- Externally Provided Workers (EPWs): Costs of workers provided by staff providers.
Calculate Enhanced R&D Expenditure:
- SMEs: Multiply qualifying expenditure by 130% and add this to the original expenditure (incurred before April 1st 2023).
- Large companies (using the RDEC scheme): Multiply qualifying expenditure by 13%.
Tax credit calculation:
- SMEs: If profitable, multiply the enhanced R&D expenditure by the corporation tax rate (19% as of 2023). If loss-making, multiply the enhanced expenditure by 14.5% (credit rate).
- Large companies (RDEC): Multiply the enhanced expenditure by 13%, then tax this figure at the corporation tax rate (19%).
Determine the benefit:
- SMEs: The benefit can be a reduction in the corporation tax bill or a payable credit.
- Large companies (RDEC): This results in either a reduction in the tax payable or a cash credit after tax.

Example calculation for SMEs:

Qualifying R&D expenditure: £100,000
Enhanced expenditure (incurred before April 1st 2023): £100,000 + (£100,000 * 130%) = £230,000
Tax saving (profitable company): £230,000 * 19% = £43,700
Tax credit (loss-making company): £230,000 * 14.5% = £33,350