Introduced on 1 April 2013, the Research and Development Expenditure Credit was designed to increase visibility and certainty of R&D tax relief and give large companies, and some SMEs, the option to take advantage of the RDEC instead of the current enhanced deduction (large company scheme) provisions.

In this article, Simon Brown, managing director and Malcolm Henderson, technical specialist of ForrestBrown, put forward a few possible scenarios designed to help you understand the two schemes and get to grips with their benefits.

It also gives case study examples of the calculations for large profitable companies, loss-making companies, and loss-making businesses that become profitable, and the impact of RDEC on the P&L.

With this information you will be better placed to weigh up the benefits of each scheme and fully understand their implications and complexities. Of course, we are always on hand if you need help to review or optimise your claims.