R&D Tax Relief Estimator (Merged Scheme, 2026/27).

From 1 April 2024, the previous SME and RDEC schemes were merged into a single scheme with a 20% above-the-line (ATL) tax credit. The ATL credit appears as income in the profit and loss account, reducing the company's CT liability. For profitable companies, the net benefit after CT equals the full gross credit. The scheme applies to all company sizes with the same rates.

Qualifying R&D costs include staff costs (salaries, employer NI, pension contributions), subcontracted R&D (65% of the subcontract cost), externally provided workers (65%), consumables used in R&D, data and cloud computing costs, and some software costs. Capital expenditure is not eligible, but R&D-related revenue expenditure generally is.

A loss-making SME is generally R&D-intensive when qualifying R&D expenditure is at least 30% of its relevant total expenditure (with a one-year grace period in some cases). Under ERIS, the company receives an 86% additional deduction and may surrender qualifying losses for a 14.5% payable credit. That can produce a maximum cash benefit of 26.97% of qualifying spend, but only where enough loss is surrenderable.

R&D relief is claimed through the company tax return (CT600) with supporting documentation in an Additional Information Form (AIF) submitted to HMRC before or alongside the return. Claims must be made within 2 years of the end of the accounting period. HMRC processes most claims within 40 working days, though complex claims may take longer.

Yes, significantly. The merged scheme replaced both SME R&D Relief and RDEC from 1 April 2024. Before the merger, SMEs could claim a 186% deduction (or 10% payable credit if loss-making), while larger companies used RDEC at 20%. The merged scheme at 20% is less generous for SMEs but simpler. HMRC has also increased scrutiny — claims must now include detailed technical narratives.