R&D tax relief calculator, 2026/27

How this is calculated

Since accounting periods starting on or after 1 April 2024, most companies claim under the merged RDEC-style scheme, receiving a taxable credit of 20.0% of qualifying R&D expenditure, shown as income above the line, which is then subject to corporation tax, leaving a net cash benefit after tax.

Loss-making companies that are R&D intensive, where qualifying R&D expenditure is at least 30.0% of total expenditure, can instead claim under the Enhanced R&D Intensive Support scheme, getting a 86.0% enhancement on qualifying costs and surrendering the resulting loss for a payable credit at up to 14.5%, which is more generous for genuinely early-stage, loss-making R&D companies.

Qualifying expenditure typically includes staff costs, subcontractor and externally provided worker costs (at a restricted rate), consumables, software and, in some cases, data and cloud computing costs directly used for R&D, but excludes production, distribution and most capital costs.

What counts as qualifying R&D

The work must seek an advance in science or technology that is not readily deducible by a competent professional in the field, resolving genuine scientific or technological uncertainty, not simply applying existing techniques or improving aesthetics or user experience alone.

Software development, engineering, manufacturing process improvement and materials development are common qualifying areas for limited companies, but a claim needs a technical narrative explaining the uncertainty and the work done to resolve it, alongside a cost breakdown.

Making a claim

Claims are made through the company tax return, and since August 2023 all claims need an additional information form submitted to HMRC beforehand setting out the qualifying projects and costs. First-time claimants, and those who have not claimed in the previous three years, must also submit a claim notification form within six months of the period end.

HMRC compliance activity on R&D claims has increased significantly, so contemporaneous project and cost records, rather than a claim reconstructed after the event, materially reduce enquiry risk.

What replaced the old SME and RDEC schemes?

For accounting periods starting on or after 1 April 2024, the separate SME and RDEC schemes were merged into a single RDEC-style scheme, alongside a distinct Enhanced R&D Intensive Support (ERIS) scheme for loss-making, R&D-intensive small and medium companies.

What R&D intensity is needed for ERIS?

A loss-making company qualifies for ERIS where qualifying R&D expenditure is at least 30.0% of its total expenditure for the period, a threshold reduced from 40% when the scheme was introduced.

Is the RDEC credit taxable?

Yes, the merged scheme credit is brought into account as taxable income above the line, so corporation tax is charged on it, which is why the net cash benefit is lower than the headline percentage suggests.

Do I need to notify HMRC before claiming?

First-time claimants, and anyone who has not made an R&D claim in the preceding three years, must submit a claim notification form within six months of the end of the accounting period, and everyone must submit an additional information form before or with the claim.