R&D Tax Credits Calculator (SME Scheme)
How to Use This Calculator
Include staff, contractor (65% cap), consumables, and software costs for qualifying R&D activities.
Profitable companies get a tax reduction; loss-making companies can claim a cash refund from HMRC.
Most companies now use the merged RDEC scheme (April 2024+). R&D intensive SMEs retain enhanced rates.
The calculator shows total tax benefit and the effective net cost of your R&D after relief.
Frequently Asked Questions
What qualifies as R&D for HMRC?
R&D must seek to achieve a scientific or technological advance. Activities must involve resolving scientific/technological uncertainties that aren't readily deducible by a competent professional. It's broader than you might think — software development, product innovation, and process improvements often qualify.
What is the merged RDEC scheme (April 2024)?
From April 2024, the SME and RDEC schemes largely merged. Most companies now claim under a single scheme with a 20% above-the-line credit. R&D intensive SMEs (≥40% R&D spend as % of total) can still use enhanced rates.
What costs qualify for R&D relief?
Qualifying costs include: staff salaries and NI, subcontractors (65% of costs), consumable materials used in R&D, software, cloud computing costs, and payments to clinical trial volunteers.
Can I claim R&D on a grant-funded project?
Subsidised R&D (grant-funded or subsidised contracts) is generally ineligible for the enhanced SME scheme. These costs may instead qualify under the standard RDEC scheme — which is why the merger matters.
How do I claim R&D tax credits?
Claim via your Corporation Tax return (CT600). You must submit an 'Additional Information' form via HMRC's R&D claim portal before or alongside your CT600. HMRC has 28 days to flag queries after receiving the claim.
What is the R&D intensive SME threshold?
An SME qualifies for enhanced rates if its qualifying R&D expenditure is at least 40% of total deductible expenditure. Loss-making intensive SMEs can claim a 14.5% payable credit (vs 10% for standard loss-making companies).
Can I backdate an R&D claim?
Yes — you can amend a Corporation Tax return within 2 years of the end of the accounting period. So a claim can be made up to 2 years after the year-end in which the R&D took place.
Do I need an R&D specialist adviser?
You can claim yourself via your CT600, but given the complexity of qualifying activities and the risk of HMRC enquiry, many companies use specialist R&D tax advisers. Adviser fees are often outweighed by the additional reliefs identified.