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    UK R&D Tax Credit & Relief Calculator

    Calculate your UK R&D tax credit under HMRC's 2024 merged scheme. Covers the 20% RDEC rate, the 27% Enhanced R&D Intensive Support (ERIS) rate, and loss-making SMEs.

    2024 Merged Scheme
    Last updated
    R&D Details
    Based on post-April 2024 merged scheme rates.
    £
    £

    Used to calculate your R&D intensity ratio (30% threshold for ERIS).

    Enter your R&D spend to see results

    How the UK R&D Tax Credit Is Calculated (Merged Scheme & ERIS)

    The UK's R&D tax relief landscape changed significantly from accounting periods beginning on or after 1 April 2024. HMRC merged the previous SME R&D relief and the Research and Development Expenditure Credit (RDEC) into a single merged scheme. Most companies now claim an above-the-line credit of 20% on qualifying R&D expenditure — meaning the credit is recognised in the profit and loss account before tax, improving headline profitability ratios.

    One significant carve-out exists for R&D-intensive SMEs. If a company qualifies as an SME (broadly, fewer than 500 staff and either turnover under €100m or balance sheet under €86m) and its qualifying R&D expenditure represents 30% or more of its total expenditure, it qualifies for the Enhanced R&D Intensive Support (ERIS) scheme at a 27% credit rate.

    The merged scheme credit is taxable: for a profitable company paying corporation tax at 25%, a 20% gross credit yields a net benefit of 15% of R&D spend. For loss-making companies, HMRC will repay the credit after withholding the equivalent corporation tax amount. Qualifying expenditure includes staff costs, subcontractor costs (subject to restrictions), consumables, and certain software costs.

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    Frequently Asked Questions

    What changed about R&D tax relief in April 2024?
    From accounting periods starting on or after 1 April 2024, HMRC merged the SME R&D enhanced deduction scheme and the RDEC scheme into a single merged scheme paying a 20% above-the-line credit to most companies. The previous SME scheme (which offered enhanced deductions worth up to 186% of qualifying spend) was abolished, except for the new ERIS scheme for SMEs spending at least 30% of their total expenditure on qualifying R&D, who receive a 27% credit.
    What qualifies as R&D for tax purposes?
    HMRC defines R&D as work that seeks to achieve an advance in science or technology by resolving a scientific or technological uncertainty — something not readily deducible by a competent professional. Eligible costs include: employee costs, subcontracted R&D (subject to restrictions), consumables, and certain software costs. Pure commercial development, routine testing, and market research do not qualify.
    What is an R&D-intensive SME and how is the 30% threshold calculated?
    An R&D-intensive SME qualifies as an SME (fewer than 500 employees, turnover under €100m or balance sheet under €86m) and its qualifying R&D expenditure represents at least 30% of its total relevant expenditure in the accounting period. If your R&D spend clears this threshold, you qualify for ERIS at a 27% credit.
    Can a loss-making company claim R&D tax relief?
    Yes. The merged scheme credit is above-the-line. If the company has no taxable profits, HMRC will repay the credit after withholding the equivalent corporation tax liability. For a loss-making company under the merged scheme: 20% gross credit × (1 − 25%) = 15% net; under ERIS: 27% × (1 − 25%) = 20.25% net.
    How long does an R&D tax claim take, and can HMRC enquire into it?
    HMRC aims to process straightforward R&D claims within 40 working days. HMRC has significantly increased scrutiny in recent years. Claims must be made within two years of the end of the relevant accounting period. Strong contemporaneous documentation of qualifying activities significantly reduces enquiry risk.

    Disclaimer: These calculators provide estimates for illustrative purposes only and do not constitute tax, legal, or financial advice. Figures are based on published UK 2025/26 rates. Your actual liability will depend on your full circumstances. Stertha Advisory Ltd accepts no liability for decisions made based on these estimates. Please consult a qualified adviser for tailored guidance.

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