It depends on the scheme and your tax position, but the arithmetic is public and short. Under the merged scheme, £100,000 of qualifying spend produces a gross credit of £20,000; the credit is taxable, so the net benefit is £15,000 at the 25% main rate of corporation tax and £16,200 at 19%.
The merged scheme, in cash
The gross credit is 20% of qualifying expenditure, which is where £20,000 on £100,000 comes from. Because it is brought into tax, what a company keeps depends on the rate it pays: 15p per £1 of qualifying spend at the 25% main rate, 16.2p at 19%. Companies in the marginal relief band land slightly below 15p.
A loss-maker taking the credit in cash gets £16,200 on that £100,000, because it has no main-rate profits and the notional tax applied to the credit is charged at the 19% small profits rate. The amount deducted along the way is not thrown away: it carries forward against future corporation tax, or can be surrendered to another company in the group. Payable credits are also subject to the PAYE cap, which limits the cash a company with a small payroll can receive.
ERIS, where the rate is higher
A loss-making, R&D-intensive SME claiming ERIS is on different numbers. The relief works through an additional 86% deduction, 186% in total, and a payable credit of 14.5% of the surrenderable loss: £100,000 × 186% × 14.5% = £26,970 in cash, assuming sufficient losses to surrender. That credit is not taxable, so 26.97p per £1 is what the company keeps. It is subject to the PAYE cap, and it is only available where the company clears the 30% intensity condition — or cleared it, and obtained relief, in its most recent prior twelve-month period.
What moves your own number
Which scheme applies comes first, and it is not a choice: ERIS is open only to loss-making intensive SMEs, while the merged scheme applies at every size. Next is your tax position — profitable at 25%, inside the marginal band, or loss-making and taking the cash — which sets the rate at which the merged scheme credit is taxed. Then there is how much of your expenditure actually qualifies, and that is where the real variance sits. Two companies spending the same on similar work can end up with very different qualifying figures depending on how the work is staffed and contracted.
Earlier periods are a separate exercise. Accounting periods beginning before 1 April 2024 fall under the old SME and RDEC schemes, whose rates moved more than once; the rates by year page sets out what applied when. That still matters for claims inside the amendment window, which runs two years from the end of the period of account. The last standard deadlines for old-scheme periods fall in late March 2027, and many year ends have already closed.
Where to go next
Put your own figures through the claim value calculator for an indication, then treat that as a starting point rather than an answer. The number that matters is the one that follows from qualifying expenditure identified properly, and that is a question about the work rather than the spreadsheet. We will tell you what we think a claim is worth before you commit to preparing one.
Written by Matthew Jones ACA CTA. Last reviewed July 2026.
Sources
- R&D tax relief: the merged scheme and ERIS — the credit rates, the intensity condition and the ERIS calculation.
- Work out your research and development tax relief — HMRC’s guidance on calculating a claim.
This page describes the rules as they stood at the review date above, as general information rather than advice on your circumstances. For how that distinction works, see our terms; for an answer on your own facts, talk to us.