Claim.
Reinvest.
Succeed.

What is it worth?

We are sure you want to understand the benefit available….the answer is “it depends” and there have been recent changes impacting how much a claim is worth. This is a little bit dry….but don’t give up just yet!

R&D Expenditure Credit (RDEC)

Under this regime for large companies, a taxable credit is claimed. The rate of the RDEC is now 20% for expenditure from 1 April 2023 (previously 13%). If profit-making, the credit is used to discharge all or part of your corporation tax liability. If you have no corporation tax liability, you will benefit through a cash payment or reduction in tax or other duties.

SME regime

This regime provides for an additional deduction against taxable profits at 86% for expenditure incurred from 1 April 2023. With the corporation tax rate at 25%, this means the effective benefit for a tax-paying company is 21.5%. If you are loss-making, you can exchange losses for a payable credit (at a rate of 10%), if profitable you will see a reduction in your corporation tax liability. Note that loss-making R&D intensive SME’s (companies that spend at least 40% of their total expenditure on qualifying R&D) can access benefits of up to 27% as they are subject to different rules.