Your business
Company size
Loss-making SME >
Profit-making SME >
R&D intensive SME*>
Large company >
Until 31 March 2024
SME R&D tax incentive
Before 1 April 2023
Up to 33.35%
Up to 24.7%
N/A
N/A
SME R&D tax incentive
After 1 April 2023
Up to 18.6%
Up to 21.5%
Up to 27%
N/A
Until 31 March 2024
RDEC
Before 1 April 2023
10.5%
10.5%
N/A
10.5%
RDEC
After 1 April 2023
15%
Up to 16.2%
N/A
Up to 16.2%
From 1 April 2024
Single scheme
–
16.2%
Up to 16.2%
N/A
Up to 16.2%
SME intensive scheme
.
N/A
N/A
Up to 27%
N/A
* For accounting periods starting on or after 1 April 2024, the R&D intensive threshold for loss-making SMEs falls from 40% to 30%.
Our impact calculator provides an indicative guide to businesses looking to assess what the new rates will mean for their future R&D tax relief claims. However, it is no substitute for tailored advice from ForrestBrown’s expert team, so please do get in touch for a more detailed analysis.
How to calculate R&D for SMEs
For the purposes of R&D tax relief, SMEs are classified as having fewer than 500 staff and not more than either €100 million turnover or €86 million gross assets.
For profit-making SMEs, R&D relief reduces your Corporation Tax bill. The rate of relief is up to 21.5%.
If you’re a loss-making SME, you’ll typically receive R&D relief in the form of a cash credit because you don’t have a tax liability to offset. The rate of relief is 19%.
Loss-making SMEs classed as R&D intensive (spending 40% or more of total business expenditure on R&D) are eligible for a higher rate of relief of 27%.
Read more on current R&D tax credit rates for SME incentive.
How to calculate R&D for RDEC
The Research and Development Expenditure Credit (RDEC) is primarily for large companies. But the incentive is also for those SMEs who in some instances can’t use the SME R&D tax credit.
Your RDEC claim generates a taxable above-the-line credit of 20% of your identified R&D costs. As this is taxable it results in a net benefit of up to 16.2% after tax.
These costs can be offset against your tax bill or, if there is no tax payable, you could receive the net amount as cash.
Read more on current R&D tax credit rates for RDEC.
Calculate the impact of the new R&D tax relief rates
Our R&D tax relief calculator helps you assess the indicative impact of changes to rates of relief introduced for expenditure from 1 April 2023.
1 Who are you
2 What is the financial position of your company
3 What is your estimated spend on R&D per year?
3 What is your estimated spend on R&D per year?
4 What is your estimated total business expenditure per year?
4 What is your estimated total business expenditure per year?
4 What is your estimated total business expenditure per year?
4 What is your estimated total business expenditure per year?
2 What is your estimated spend on R&D per year?
SME
Fewer than 500 staff and either not more than €100 million turnover or €86 million gross assets.
Although most SMEs use the SME R&D tax relief scheme, there are some factors that might mean you need to use RDEC – or both incentives.
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Profit making
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£50,000 spend
Do you know what costs qualify for R&D tax relief? Find out more
We estimate you could receive up to £ 10750 as a tax credit
-
£250,000 spend
Do you know what costs qualify for R&D tax relief? How do you identify how much R&D each staff member does?
We estimate you could receive up to £ 53750 as a tax credit
-
£500,000 spend
Do you know how much you can claim for your subcontractors? Can I claim R&D tax relief on subcontractors?
We estimate you could receive up to £ 107500 as a tax credit
-
£1,000,000 spend
Do you know what costs qualify for R&D tax relief? What costs qualify for R&D tax relief?
We estimate you could receive up to £ 215000 as a tax credit
-
-
Loss making
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£50,000 spend
-
£50,000 total expenditure
Do you know how much you can claim for your subcontractors? Can I claim R&D tax relief on subcontractors?
We estimate you could receive up to £ 13485 as a tax credit
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£50,000 spend
£100,000 total expenditure
Do you know what costs qualify for R&D tax relief? Find out more
We estimate you could receive up to £ 13485 as a tax credit
-
£50,000 spend
£250,000 total expenditure
Do you know what costs qualify for R&D tax relief? What costs qualify for R&D tax relief?
We estimate you could receive up to £ 9300 as a tax credit
-
£50,000 spend
£500,000 total expenditure
Do you know what costs qualify for R&D tax relief? How do you identify how much R&D each staff member does?
We estimate you could receive up to £ 9300 as a tax credit
-
-
£250,000 spend
-
£250,000 total expenditure
Do you know what costs qualify for R&D tax relief? How do you identify how much R&D each staff member does?
We estimate you could receive up to £ 67425 as a tax credit
-
£250,000 spend
£500,000 total expenditure
Do you know what costs qualify for R&D tax relief? How do you identify how much R&D each staff member does?
We estimate you could receive up to £ 67425 as a tax credit
-
£250,000 spend
£1,000,000 total expenditure
Do you know how much you can claim for your subcontractors? Can I claim R&D tax relief on subcontractors?
We estimate you could receive up to £ 46500 as a tax credit
-
£250,000 spend
£2,500,000 total expenditure
Do you know what costs qualify for R&D tax relief? What costs qualify for R&D tax relief?
We estimate you could receive up to £ 46500 as a tax credit
-
-
£500,000 spend
-
£500,000 total expenditure
Do you know what costs qualify for R&D tax relief? How do you identify how much R&D each staff member does?
We estimate you could receive up to £ 134850 as a tax credit
-
£500,000 spend
£1,000,000 total expenditure
Do you know how much you can claim for your subcontractors? Can I claim R&D tax relief on subcontractors?
We estimate you could receive up to £ 134850 as a tax credit
-
£500,000 spend
£2,500,000 total expenditure
Do you know what costs qualify for R&D tax relief? What costs qualify for R&D tax relief?
We estimate you could receive up to £ 93000 as a tax credit
-
£500,000 spend
£5,000,000 total expenditure
Do you know what costs qualify for R&D tax relief? What costs qualify for R&D tax relief?
We estimate you could receive up to £ 93000 as a tax credit
-
-
£1,000,000 spend
-
£1,000,000 total expenditure
Do you know how much you can claim for your subcontractors? Can I claim R&D tax relief on subcontractors?
We estimate you could receive up to £ 269700 as a tax credit
-
£1,000,000 spend
£2,500,000 total expenditure
Do you know what costs qualify for R&D tax relief? What costs qualify for R&D tax relief?
We estimate you could receive up to £ 269700 as a tax credit
-
£1,000,000 spend
£5,000,000 total expenditure
Do you know how much you can claim for your subcontractors? Can I claim R&D tax relief on subcontractors?
We estimate you could receive up to £ 186000 as a tax credit
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£1,000,000 spend
£10,000,000 total expenditure
Do you know how much you can claim for your subcontractors? Can I claim R&D tax relief on subcontractors?
We estimate you could receive up to £ 186000 as a tax credit
-
-
Large company
500 staff or more and either more than €100 million turnover or €86 million gross assets.
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£50,000 spend
Do you know what costs qualify for R&D tax relief? What costs qualify for R&D tax relief?
We estimate you could receive up to £ 7500 as a tax credit
Estimate based on 25% Corporation Tax rate.
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£250,000 spend
Do you know what costs qualify for R&D tax relief? Find out more
We estimate you could receive up to £ 37500 as a tax credit
Estimate based on 25% Corporation Tax rate.
-
£500,000 spend
Do you know what costs qualify for R&D tax relief? How do you identify how much R&D each staff member does?
We estimate you could receive up to £ 75000 as a tax credit
Estimate based on 25% Corporation Tax rate.
-
£1,000,000 spend
Do you know what costs qualify for R&D tax relief? How do you identify how much R&D each staff member does?
We estimate you could receive up to £ 150000 as a tax credit
Estimate based on 25% Corporation Tax rate.
Limitations of a tax credit calculator
Although it’s a useful indicator for businesses planning R&D investment, our calculator is no replacement for advice from our expert team. Get in touch below to find out more.
Discuss your claim with our expert team
Get in touch to arrange a claim review with our expert team
How can we help you?
To find out more about how R&D tax credits can benefit you business, get in touch with our team.
- Telephone
- 0117 926 9022
- hello@forrestbrown.co.uk