R&D Tax Credit Calculator UK

R&D tax relief is a UK government incentive that rewards companies for investing in innovation. Any UK limited company that carries out qualifying R&D activities can claim, regardless of industry or size. The work must seek to advance science or technology by resolving scientific or technological uncertainty.

From 1 April 2024, the SME and RDEC schemes merged into a single merged scheme with a 20% above-the-line tax credit for most companies. Loss-making SMEs that are R&D intensive (40%+ of expenditure on R&D) can claim the enhanced R&D intensive support (ERIS) scheme at a higher rate.

Qualifying costs include: staff costs (salaries, NI, pension for employees working on R&D), subcontractor costs (65% for connected, varies for unconnected), consumable materials used in R&D, software licences used directly in R&D, and relevant payments to subjects of clinical trials. Capital expenditure does not qualify.

Under the merged scheme from April 2024, the credit rate is 20% of qualifying expenditure. For a profitable company paying 25% corporation tax, this gives an effective benefit of approximately 15% of qualifying spend after accounting for the tax on the credit. Loss-making companies can receive a payable cash credit.

While tech and pharma are obvious, many industries claim R&D tax credits: construction (new building methods, materials testing), manufacturing (process improvements, new product development), food and drink (recipe development, shelf-life extension), agriculture (crop science, automation), and financial services (algorithm development, fintech).

Yes, absolutely. R&D tax relief is about the attempt to resolve uncertainty, not the outcome. Failed projects, abandoned prototypes, and unsuccessful experiments all qualify as long as the work was seeking to advance science or technology. In fact, failure often demonstrates genuine technological uncertainty.

You can amend your corporation tax return to include an R&D claim for up to 2 years after the end of the accounting period. For example, for a year ending 31 March 2024, you have until 31 March 2026 to submit or amend the claim.

HMRC expects: a written technical narrative describing the R&D projects and uncertainties, project-level cost breakdowns, timesheets or time allocation records for staff, evidence of subcontractor and consumable costs, and contemporaneous records (emails, lab notes, design documents). Good record-keeping from the start makes claims much easier.

HMRC has significantly increased compliance activity on R&D claims since 2023. All first-time claims and claims above certain thresholds are reviewed. Having a robust technical narrative, clear cost methodology, and supporting evidence dramatically reduces enquiry risk. Professional review before submission is recommended.

Yes. Construction companies regularly claim for: developing new building techniques, testing innovative materials, creating bespoke engineering solutions, overcoming ground condition challenges, developing modular or offsite construction methods, and improving energy efficiency beyond standard practice. The key is demonstrating technological uncertainty.