R&D Tax Credit SME Calculator 2026

R&D tax relief allows UK companies to claim back a portion of their research and development expenditure as a tax credit or enhanced deduction. It is designed to incentivise innovation. From April 2024, most companies use the merged RDEC scheme at 20%.

Under the merged RDEC scheme (from 1 April 2024), companies receive a 20% above-the-line credit on qualifying R&D expenditure. R&D-intensive SMEs (R&D spend >30% of total) receive 27%. Net benefit after 25% corporation tax is approximately 15% for most profitable companies.

From 1 April 2024, the old SME scheme (130% enhanced deduction) and RDEC were merged into a single RDEC scheme at 20% for all companies. R&D-intensive SMEs (formerly known as loss-making R&D-intensive SMEs) retain a higher 27% rate.

Qualifying R&D must seek to achieve an advance in science or technology by resolving a technological uncertainty. Qualifying costs include: staff wages and NIC, subcontractors (65% of costs), consumable materials, software licences for R&D, and utilities.

Yes — loss-making companies can receive a payable cash credit (surrendering losses). Under the merged RDEC scheme, profitable companies offset the credit against corporation tax; loss-making companies can receive the credit as a cash payment from HMRC.

R&D-intensive SMEs — companies where qualifying R&D expenditure exceeds 30% of total expenditure — receive a 27% RDEC rate (vs 20% standard). This was introduced to protect highly innovative small companies most affected by the merger.

R&D claims are made on your Company Tax Return (CT600). You must submit an Additional Information Form (AIF) to HMRC before or with your CT600. Claims must be made within 2 years of the end of the accounting period.

Yes — HMRC increased R&D scrutiny significantly from 2022 after widespread abuse. Many claim management companies submitted fraudulent claims. HMRC now reviews more claims, may send Additional Information Forms, and can enquire up to 6 years back. Use a reputable specialist.