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R&D Tax Credit Calculator

R&D Tax Credit Calculator

R&D Tax Credits are a very niche part of the UK tax code that could bring your company thousands of pounds in tax relief

Complete our R&D tax credit calculator to find out how much tax relief you could potentially claim

Is your company profit-making?

Don't worry if you can't input the exact figures into our R&D tax credits calculator - estimated values will still give us a good idea of what your claim may be

Please Note: The information generated by our R&D tax credits calculator should be interpreted as an indicative value range only. The information generated should not be included in any documents submitted to HMRC. Please contact randd for further details.

Great news... it looks like you’re eligible to claim back some of your spend!

BASED ON THE INFORMATION YOU PROVIDED, WE COULD HELP YOU CLAIM BACK BETWEEN:

R&D REPORT

  • Across all sectors, the average amount reclaimed for our clients is £
  • In the sector, the average amount reclaimed for our clients is £

CLAIMS MADE BY COMPANIES IN YOUR SECTOR

Claim Value:
Date:

Did you know?

We have successfully claimed over £237 million in R&D Tax Credit, across multiple sectors, often for clients who didn't expect to be eligible.

    Here’s your R&D Report, !

    R&D REPORT FOR

    Based on the information you provided, it looks like we could help you claim back up to £ for .

    • Across all sectors, the average amount reclaimed for our clients is £50,000.
    • In the sector, the average amount reclaimed for our clients is

    CLAIMS MADE BY COMPANIES IN THE SECTOR

    SOME OF THE CLIENTS WE HAVE WORKED WITH IN YOUR SECTOR

    Get in touch to start your claim today!

    HOW CAN RANDD CREATE EXTRA VALUE FOR YOU?
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    Our proven track record has demonstrated that randd can help you claim back up to 12x more value compared to their accountants, self submission or an alternative R&D agent

    How will I be impacted by future changes to R&D tax credit rates?

    In the 2023 Autumn Statement, the government announced reforms to R&D tax credit relief that would come into effect from April 2024 and which were designed to simplify and improve the system.

    For accounting periods that begin on or after April 1 2024, the RDEC and SME schemes will be merged into one, apart from loss-making SMEs that are R&D intensive – which means more than 30% of their total expenditure is incurred on research and development.

    The figure of 30% is a reduction from the previous 40% and SMEs which cross that threshold in terms of their expenditure on research and development will qualify for a new SME intensive scheme.

    An R&D tax credit rate of 20%, the same as for the discontinued RDEC scheme, will apply to the merged scheme, while loss-making R&D intensive SMEs will receive a 27% tax credit. Use our R&D tax credit calculator to work out what this will mean for you.

    To qualify as an SME, and therefore be eligible to be classed as R&D intensive, a company must have fewer than 500 staff and either a turnover of under 100 million euros or 86 million euros gross assets.

    You will also need to consider whether the decision to carry out R&D activity sits within your company or elsewhere in the supply chain. Generally, companies will not be able to make a claim if R&D has been contracted to them.

    How to calculate R&D tax credits

    How to use the R&D tax credit calculator

    Whether your company qualifies for the SME or RDEC scheme, you can use our R&D Tax Credit Calculator on this page to work out how much tax relief you could potentially claim.

    You’ll be asked to input the following figures:

    • R&D labour & materials
    • R&D subcontracted figures

    As well as:

    • Whether your company is profit-making (yes or no)
    • Which industry your company is categorised in

    Please be aware the figure generated by the calculator is only an indicative estimate. Once you have used our free R&D tax credit calculator, seek expert professional advice by speaking to one of our experts.

    A person typing on a laptop, surrounded by various transparent icons related to research and development (R&D) floating above the laptop. The icons encircle a box with the text 'R&D', with 'Research and Development' written smaller underneath.

    Calculate R&D tax credits for SMEs

    This guidance applies to claims for accounting periods that began no later than 31st March 2024. Companies can make retrospective claims for the previous two years.

    To qualify as an SME (small and medium-sized enterprise), your company must have fewer than 500 staff and a turnover of under 100 million euros or a balance sheet total under 86 million euros.

    The R&D tax credit calculation for those claiming under the existing SME scheme involves:

    • Deducting an additional 86% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total of 186% deduction
    • Claiming a payable tax credit if the company has claimed relief and made a loss; the payable credit is worth up to 10% of the surrenderable loss

    The exception to these guidelines is loss-making SMEs that are classed as being R&D intensive. If an SME’s qualifying R&D expenditure is at least 40% of their total expenditure, they can claim a higher payable tax credit rate of 14.5% for qualifying R&D expenditure.

    Here’s a guide to using the R&D tax credits calculator to work out the total expenditure figure on which you can claim R&D tax relief:

    • Work out the costs that are directly attributable to R&D
    • Reduce any relevant subcontractor or external staff provider payments to 65% of the original cost
    • Add all costs together
    • Multiply the figure by 86%
    • Add this to the original R&D expenditure figure

    Calculate R&D tax credits for RDEC

    This guidance applies to claims for accounting periods that began no later than 31st March 2024. Companies can make retrospective claims for the previous two years.

    Larger companies are covered by the RDEC scheme. These are defined as having more than 500 staff and a turnover of more than 100 million euros or a balance sheet total over 86 million euros.

    It also applies to SMEs who are not available for the SME scheme due to having received grants or subsidies, or which have been subcontracted to carry out research and development work by a large company.

    Whether the company makes a profit or loss, some or all of the research and development expenditure credit may be used to settle the company’s Corporation Tax liabilities, or those of another company within the same group.

    This R&D tax credit calculation needs to be at a rate of 20% of the company’s qualifying R&D expenditure.

    Here’s a guide to working out your R&D tax credits calculation under the RDEC scheme:

    • Work out the costs that are directly attributable to R&D
    • Reduce any relevant subcontractor or external staff provider payments to 65% of the original cost
    • Add all costs together
    • Multiply the figure by the expenditure credit rate of 20% to get the expenditure credit

    How to calculate the impact of R&D tax relief

    R&D tax credits are the subject of continual review by the government to ensure they are serving the purpose, and to best effect, for which they were designed.

    In the spring of 2023, when the rates of relief were revised, the government said the R&D tax credits schemes were being reformed “to ensure public money is spent effectively and best supports innovation”. What this meant was that the reforms were intended to increase and encourage R&D activity, with the aim of generating private investment and a boost in economic growth.

    Figures published by HMRC showed that both the SME and RDEC schemes were successful in promoting additional R&D expenditure.

    Studies from the Treasury showed that for every £1 of support, the RDEC scheme incentivised £2.40–£2.70 of additional private R&D expenditure, and the SME scheme incentivised an additional £0.60–£1.28.

    Another modification which has impacted the amount of R&D tax relief a company can claim centred upon which types of expenditure qualify for inclusion.

    For instance, cloud computing and data acquisition costs (where they directly relate to R&D activity) have extended the scope of qualifying expenditure. Such costs are common in certain industries, e.g. within technology, media and telecommunications companies.

    Also, the definition of R&D for tax reliefs has been expanded to include all mathematics, clarifying in particular that ‘pure maths’ can qualify.

    How much R&D tax credits can you claim?

    Here are some R&D tax credit calculation examples for the different categories of business and the rates of relief that apply to them, bearing in mind the size of your claim will depend on the scale of your R&D activity and costs.

    A profitable SME: In addition to the tax relief your company’s eligible R&D expenditure generates as part of its normal operational costs, a further 86% can be deducted from the yearly profit. That means with an R&D tax credit incentive of up to 21.5%, if you spent £500,000 per year on R&D you could potentially claim back up to £107,500 as a tax refund or reduced tax liability.

    A loss-making SME: A payable credit can be claimed by loss-making SMEs. With an R&D tax credit incentive of up to 18.6%, if a company spent £500,000 per year on R&D it could potentially claim back up to £93,000.

    A loss-making, R&D intensive SME: To be defined as R&D intensive constitutes at least 40% of a company’s total expenditure being spent on research and development. Businesses in this category are eligible for an R&D tax credit incentive of up to 27%, which means if you spent £500,000 per year on R&D you could potentially claim back up to £135,000.

    A large company (RDEC scheme): By offering a tax credit of 20%, companies can claim back up to 20p for every £1 spent on qualifying R&D activities. Whether the company is making a profit or loss is immaterial. If a company spent £500,000 per year on R&D, it could potentially claim back up to £100,000.

    If there is anything you are unsure about regarding our R&D tax credits calculator, contact us on 01332 477070 or email info@randduk.com to find out more about how we can help.

    Speak to an R&D tax credit calculation expert today