R&D Tax Credit Calculator

The easiest way to calculate your company’s estimated R&D tax relief is by using the calculator.

Do you have more than 500 employees and turnover exceeding €100,000,000?

No

How much have you spent on R&D?

£10,000

What was your profit the same year?

£0

Our upfront fee

Always £0

You could receive a tax credit of

£1,885

Please note: This calculator is intended as a rough guide.

Calculation Example

As a simplified example; if an SME had developers working exclusively on an eligible R&D project and paid them a total of £150,000 per year, they could use the incentive record that expense at £345,000 (230% x £150,000). The additional £195,000 of the expenses would mean the company’s taxable profit would be reduced.

The calculation shows how this affects a profitable company; £29,625 from corporation tax savings and the payable tax credit. In total they would receive back 19.75% of their R&D investment. If you are not eligible to claim the relief as an SME, you might still be able to claim under the RDEC incentive.

SME Sample Calculation

Profit / (Loss) before claim

£30,000

R&D qualifying spend

£150,000

R&D enhanced deduction

£195,000

Profit / (Loss) after claim

(£165,000)

Corporation tax saved

£5,700

Potential payable tax credit

£23,925

£29,625 potential payment from HMRC.

How to calculate for SMEs

For a profit-making SME, R&D tax credits will reduce your Corporation Tax liability for the year. The minimum rate of relief is 24.7%.

Relief is given by applying an enhanced deduction to taxable profits of 130% of the eligible spend. The revised taxable profits are then subject to the current rate of Corporation Tax which is 19%.

As an example; if you spend £200,000 on R&D you can knock just under £50,000 off your Corporation tax bill for that year.

For a loss-making SME, R&D tax credits will be given in the form of a cash payment. In these circumstances the rate of relief equates to broadly 33%.

The revised losses are surrendered to HMRC in exchange for this cash payment. The cash payment is calculated at 14.5% of the losses surrendered. As an example: if you spend £200,000 on R&D you can receive cash of up to £66,700.

For more information visit our R&D tax credits page.

How to calculate for RDEC

The Research & Development Expenditure Credit (RDEC) is available to Large Companies who fail to meet the eligibility criteria for the SME scheme as well as SMEs who are prevented from claiming under the SME scheme.

The RDEC is a standalone credit that is brought into account as a receipt when calculating trading profits. The current rate for the RDEC is 13%.

The relief is then given by either offsetting the RDEC against your tax bill or where there is no tax payable, a cash payment will be made to you. The benefit works out to be just under 11%.

For example, if you spent £200,000 on R&D during the year you could receive a £21,000 tax reduction or cash payment.

For more information visit our R&D tax credits page.

Our R&D tax credit calculator

Our R&D tax credits calculator only gives a rough estimate of the potential corporation tax saving or R&D tax credit payable that you may be eligible to claim. It is based upon your R&D costs entered. We recommend a thorough review to make sure you identify all qualifying R&D projects and all eligible costs. In our experience, companies that submit their R&D tax relief claims themselves, or through a non-specialist, often end up significantly under-claiming.

Please contact us for a more accurate estimation of your costs and projects.