R&D Tax Credits Calculator

Under the merged scheme for 2026/27, the RDEC rate is 20% of qualifying expenditure. For loss-making SMEs, the effective rate is 10.5% after the 19% corporation tax charge. Profitable SMEs can claim the enhanced deduction at 130% of qualifying costs.

The 2026/27 merged scheme replaces the separate SME and RDEC schemes with a single 20% credit rate. Small companies can no longer claim the enhanced 186% deduction but receive a direct cash credit instead. This simplifies compliance but reduces the benefit for profitable SMEs significantly.

Software development costs including staff, software, and cloud computing qualify if they directly advance scientific or technological knowledge. You must demonstrate that the project overcame technical uncertainties that a competent professional could not easily resolve. Staff costs include gross salaries, employer NICs, and pension contributions.

Under the merged scheme, subcontracted R&D costs are generally restricted to 65% of the expenditure paid to third parties. The claimant company must retain control over the R&D project and bear the financial risk. You cannot claim the full amount if the subcontractor is connected to your business.

There is no statutory cap on the total R&D tax credit claim value for large companies under the RDEC scheme. The credit is calculated as 20% of the total qualifying expenditure incurred during the accounting period. However, the claim must be supported by robust technical and financial documentation for HMRC verification.