How Much Is R&D Tax Relief?
Rates and typical amounts for research and development tax credits in the UK.
The amount of R&D tax relief you can receive depends on the scheme (SME or RDEC), your company’s profit or loss position, and the rates set by HMRC. This page explains how much R&D tax relief is typically available. It is for information only; current rates and rules are on GOV.UK.
SME scheme: enhanced deduction and credit
Under the SME scheme, qualifying R&D expenditure is enhanced by a percentage set by legislation. For profit-making companies, this increases the deduction against profits and so reduces Corporation Tax. For loss-making companies, the enhanced loss can be surrendered for a cash credit, subject to a cap. The exact percentage and cap are set by Parliament and can change; check HMRC and GOV.UK for current figures.
RDEC: taxable credit
Under RDEC (Research and Development Expenditure Credit), companies receive a taxable credit calculated as a percentage of qualifying expenditure. The credit is set by legislation and may be used to settle Corporation Tax or, in some cases, paid as cash. The rate and any restrictions (e.g. for very large companies) are published by HMRC.
What affects the amount you get?
The actual amount of research and development tax relief you receive depends on: how much qualifying expenditure you have, which scheme you use, your profit or loss position, and the rates in force for the accounting period. Other reliefs and caps can also affect the final amount. For an estimate tailored to your company, use HMRC guidance or speak to a qualified adviser.
How R&D tax credits work · Who is entitled? · R&D tax legislation