TOOLS

R&D Tax Relief ^Calculator

The R&D Tax Relief Calculator is designed to help small and medium-sized enterprises (SMEs) estimate potential savings or credits from making claims under the R&D tax relief scheme. Because calculating the relief can be complex, many businesses rely on expert resources such as specialist application agents or R&D tax relief guides to assist with data preparation and HMRC submission. This calculator helps finance managers quickly understand the financial impact of their qualifying expenditure, including staff, software, and subcontractor costs.

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How To Use The R&D Tax Relief Calculator

Collect qualifying costs

Add up staff, software, consumables, and subcontractor spend that directly relate to eligible R&D activities for the accounting period. To ensure accuracy, review R&D tax relief eligibility criteria before entering costs.

Enter tax position

Input your qualifying spend, profit or loss before relief, corporation tax rate, and period start date so the calculator applies the correct enhancement and credit rates. Learn more about corporation tax rates relevant to your period.

View savings and credit

Review the displayed tax saving if profitable or the payable cash credit if loss-making. Note both the cash amount and the effective percentage of your R&D spend. This can help in deciding whether to proceed with a claim or adjust your R&D investment.

^Benefits of Using the R&D Tax Relief Calculator

The R&D Tax Relief Calculator is a valuable tool for businesses looking to maximise their tax benefits related to research and development activities. By accurately estimating eligible R&D expenditures, companies can identify potential tax savings, which can be reinvested into further innovation and development. This calculator simplifies the process, making it easier for businesses to understand their entitlements and improve their financial position.

This calculator offers a swift estimate of how much corporation tax can be saved or cash credited under the SME R&D scheme. It supports decision-making by helping finance managers understand the financial benefits quickly, whether to file claims, increase R&D expenditure, or carry losses forward. For detailed guidance on R&D claims, visit our R&D tax relief information page.

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How R&D Tax Relief is Calculated

Enhanced deduction

Qualifying spend is uplifted by a statutory percentage.

Enhanced deduction

Enhanced deduction equals qualifying R&D spend (Q) multiplied by the additional deduction rate (R). For periods starting on or after 1 April 2023, R is 0.86; before this date, it was 1.3. The total deductible amount is the sum of Q and the enhanced deduction. This adjustment increases the amount a business can deduct from profits.

Corporation tax saving

Profitable SMEs reduce corporation tax on the extra deduction.

Corporation tax saving

The tax saving is calculated by multiplying the enhanced deduction by the applicable corporation tax rate (CT). The rate is 19% for small profits and 25% for the main rate. This saving reduces the corporation tax payable for the year.

Payable credit for losses

Loss-making SMEs can surrender losses for cash credit.

Payable credit for losses

If the SME is loss-making, it can surrender eligible losses up to the total deductible amount to claim a payable cash credit. This credit equals the surrendered loss multiplied by the credit rate (C), which is 10% from 1 April 2023, or 14.5% before then. HMRC pays this credit regardless of corporation tax liability.

Understanding Your R&D Tax Relief Calculator Results

Compare cash benefit

Check how the saving or credit compares with total qualifying spend to assess the effective subsidy percentage for your project. Typically, benefits range between 16% and 27% of your R&D spend, helping gauge the value of your claim.

Test input sensitivity

Adjust spend amounts or change the accounting period to see how updated enhancement and credit rates impact the results. This helps evaluate different scenarios, especially under changing tax rules.

Note scheme conditions

Results assume all costs qualify fully, tax rates remain constant for the period, and no grants limit the SME scheme. Remember that adviser fees, HMRC enquiries, or partial eligibility can affect the net benefit. Consult additional resources on HM Revenue and Customs for compliance details.