Current rates for accounting periods beginning on or after 1 April 2024: the merged scheme pays a 20% expenditure credit (worth 14.7p to 16.2p per £1 after tax), and ERIS pays loss-making, R&D-intensive SMEs up to 26.97p per £1. Not sure which applies? Start here.
How the numbers work
Merged scheme: a 20% credit is added above the line and then taxed, so £100,000 of qualifying spend gives a £20,000 gross credit worth £15,000 at the 25% rate, or £16,200 at 19%. Companies with augmented profits between £50,000 and £250,000 pay tax on the credit at the 26.5% marginal rate, which leaves £14,700. Loss-makers have notional tax deducted at 19% only, so the cash outcome is also £16,200 per £100,000. ERIS works differently: the additional 86% deduction takes the total to 186%, and a payable credit of 14.5% of the surrenderable loss produces up to £26,970 per £100,000 of qualifying spend, tax free.
Cost boundaries, subcontracting rules and the PAYE cap all change the outcome. A scoping conversation with a chartered adviser will give you a number you can plan around.
Is the company profitable or loss-making?
Position
Roughly what are the taxable profits for the period?
The £50,000 and £250,000 limits are divided by one plus the number of associated companies, and reduced proportionately for an accounting period shorter than 12 months, so a company in a group may fall into a different band than its profits alone suggest.
Taxable profits
Is relevant R&D expenditure at least 30% of total relevant expenditure?
Our R&D intensity calculator works the ratio out: the test compares relevant R&D expenditure with total relevant expenditure, connected companies are counted together, and payments between them come out of the total, though they stay in the R&D figure.
R&D intensity
This calculator is provided for illustration only. It applies headline rates to the single figure you enter and assumes every pound of it qualifies — a real claim rarely works like that. Cost eligibility, the 65% restriction on payments to unconnected subcontractors, contracted-out and overseas rules, marginal relief on the corporation tax rate, and the PAYE/NIC cap (£20,000 plus 300% of relevant PAYE and NIC) can each change the outcome materially. Its output is not tax advice and must not be relied on for any decision or filing. We build and check these tools carefully, but they are provided as they are, without warranty that they are accurate, complete or current: the rules change, and the tool may itself be wrong. To the fullest extent permitted by law, we accept no liability for any error in it, or for any loss arising from its use or from reliance on its output. Our full website terms apply. Before acting on a figure, have the claim scoped by a competent chartered tax adviser — we will give you a straight answer. Figures use the standard rates for accounting periods beginning on or after 1 April 2024. Accounting periods beginning before that date fall under the old SME and RDEC schemes at different rates, which still matters for the periods that remain amendable into 2027 — our rates by year page sets out what applied when.
Rates and rules last reviewed 10 August 2026.
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