R&D Tax Credits Calculator (UK 2026/27)
UK R&D tax credits can reduce your Corporation Tax bill or provide a cash payment if your company invests in innovation. From April 2024, all companies use a single merged scheme with a 20% above-the-line credit rate.
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Many companies miss out on R&D relief because they assume it only applies to lab-based research. In reality, any company resolving scientific or technological uncertainty can claim – from software development and engineering to food manufacturing and construction. The key test is whether a competent professional in the field couldn't readily deduce the solution.
Enter your qualifying R&D expenditure below to estimate your credit, net tax saving, and effective relief rate. The calculator covers the merged scheme (20%), the enhanced R&D-intensive rate (27%), and the treatment for both profitable and loss-making companies.
R&D Details
Staff costs, subcontractors, consumables, software, and cloud computing for R&D projects
R&D Tax Credit Results
Gross R&D Credit
Before Corporation Tax
Net Benefit
After tax on the credit
Effective Relief Rate
Net saving per £1 of R&D
How the Merged Scheme Works (April 2024+)
• 20% above-the-line credit on qualifying R&D expenditure
• R&D-intensive SMEs (≥30% R&D costs) get enhanced 27% rate
• Credit is taxable income – net benefit depends on your CT rate
• Loss-making companies can claim a payable tax credit
Important
R&D tax credits involve complex eligibility rules. This calculator provides estimates only. HMRC has increased compliance activity – ensure your claim meets the "seeking an advance in science or technology" test. Consider specialist advice for claims over £50,000.
How UK R&D Tax Credits Work
R&D tax credits reward UK companies that invest in innovation. If your company is working to overcome scientific or technological uncertainty – whether developing new software, engineering products, or improving manufacturing processes – you may be able to claim significant tax relief.
From April 2024, all companies use the merged R&D scheme, which provides an above-the-line credit of 20% on qualifying expenditure. This replaced the previous two-scheme system where SMEs received a 130% enhanced deduction and large companies claimed under RDEC at 20%.
R&D-intensive SMEs – where qualifying R&D spend represents at least 30% of total expenditure – benefit from an enhanced credit rate of 27%. This was introduced to protect the UK's most innovative small companies from the reduction in generosity compared to the old SME scheme.
Common R&D Claim Mistakes
HMRC has significantly increased compliance checks on R&D claims since 2023. The most common reasons for rejected claims include: failing to demonstrate genuine technological uncertainty (not just business or commercial uncertainty), claiming costs for routine development work, and including expenditure on activities that an experienced professional could readily resolve.
Other pitfalls include not filing the mandatory Additional Information Form, missing the two-year claim deadline, and incorrectly calculating subcontractor costs (only 65% of connected-party subcontractor costs qualify). Companies should maintain contemporaneous project records documenting the uncertainties faced and how they were addressed.
Frequently Asked Questions
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