Profitable company
£37,500
Reduction in corporation tax
A 20% credit of £50,000 is brought above the line and taxed at the main 25% rate, leaving the net benefit shown.
Free tool
R&D tax relief calculator
Work out what your R&D spend is worth in cash or corporation tax, and whether the work would stand up to HMRC's qualification tests. Takes about two minutes, no email required.
Entitlement calculator
Estimate what your R&D is worth
Enter the costs behind your technical work for one accounting period. We apply the current UK rules, including the 65% restriction on unconnected subcontractors, and show the working.
£
Gross salary, employer NI and pension for the time spent solving the technical uncertainty.
£
UK-based subcontractors only. Usually claimable at 65% of the invoice for unconnected parties, which we apply for you.
£
Licences, compute and datasets used directly in the R&D, apportioned to the project.
£
Materials, reagents, prototypes and a fair share of light, heat and power.
£
Payments to trial participants and other categories HMRC allows.
Does the work qualify? Five questions HMRC will ask.
- Were you resolving a technical or scientific uncertainty a competent professional could not simply look up?
- Was the work aiming at an advance in the field, not just new to your company?
- Was the work carried out mainly in the UK, or by UK-based staff and contractors?
- Is the claimant a UK limited company paying corporation tax?
- Can you evidence the project timeline, the people involved and the costs?
Worked examples on £250,000 of qualifying spend
Three companies, the same R&D spend, three different outcomes. The scheme and your tax position drive the number far more than the size of the spend does.
Loss making company
£40,500
Cash credit, subject to caps
The same £50,000 credit is reduced at the notional 19% rate for loss makers and can be paid out, subject to the PAYE and NIC cap.
R&D intensive SME
£67,425
Cash credit under ERIS
Qualifying spend is enhanced by 86% and the surrenderable loss is paid at 14.5%, available where R&D is at least 30% of total expenditure.
Figures are illustrative and rounded. Rates and thresholds are set by HMRC and can change at a Budget, so we confirm the rules for your accounting period before quoting.
How the merged scheme and ERIS rates apply
Merged R&D expenditure credit
A 20% above-the-line credit on qualifying spend, available to most UK companies whatever their size. The credit is itself taxable, so the net benefit is roughly 15.0% to 16.2% of qualifying spend depending on the corporation tax rate applied. Grant funding no longer pushes a project out of the scheme.
Enhanced R&D Intensive Support
For loss making SMEs where qualifying R&D is at least 30% of total expenditure. Qualifying spend is enhanced by 86% and the resulting loss can be surrendered for a 14.5% payable credit, worth up to around 27.0% of qualifying spend in cash.
Why this calculator differs from the static ones
- It applies the 65% restriction to unconnected subcontractor costs for you, rather than assuming every pound of spend qualifies.
- It applies the UK territorial rules, so overseas subcontracted work is excluded instead of quietly inflating the estimate.
- It tests intensity against total expenditure before offering the ERIS route, rather than showing the headline SME rate to everyone.
- It asks no email address. The number is on screen immediately, and a conversation is your choice afterwards.
What counts as R&D for tax purposes
HMRC is not asking whether the work was clever. It is asking whether a competent professional in your field faced genuine uncertainty about how, or whether, something could be achieved, and whether the attempt sought an advance in the field overall. Building a product is not automatically R&D. Solving the parts nobody could tell you how to solve usually is.
- Usually qualifies: novel algorithms and model architectures, new materials or formulations, process engineering at unproven scale, integrating systems in ways with no established route, prototypes that repeatedly failed before they worked.
- Usually does not: configuring off-the-shelf software, cosmetic product updates, market research, routine testing, and work where the answer was already published.
Turn the estimate into a claim
A free 20-minute call confirms the scheme, the qualifying costs and what the claim is realistically worth before you commit to anything.