Three things decide how much R&D Tax Relief you can claim:
R&D Tax Relief works by reimbursing you a percentage of your expenditure on qualifying costs like wages and raw materials. So, the higher your total qualifying expenditure, the higher your tax relief or cash credit.
R&D Tax Relief is made up of two schemes: SME R&D Tax Relief and the Research and Development Expenditure Credit (RDEC).
Currently, under the SME scheme, you can reclaim up to 33.35% of your total eligible expenditure.
Under the RDEC scheme, you can reclaim up to 10.5%. How much relief you’ll receive through the SME scheme depends on your financial situation. RDEC relief rates are not affected by your financial situation.
Loss-making companies can claim up to 33.35% of their costs back through the SME scheme.
Profitable companies can reclaim up to 24.7%, while companies breaking even can only reclaim 18.85%.
Note: These rates are changing on 1 April 2023. To find out more, check out our comprehensive blog.