The calculation of your R&D tax relief benefit depends on the company’s situation, whether it falls into the category of:-

  • Profitable SME
  • Loss making SME
  • Large Regime – RDEC

The financial benefit to making a R&D tax relief claim can be extremely significant.  Nowhere else will you find funding for the projects that you undertake at such a generous rate.

Profitable SME’s

Profitable SME companies will benefit on average by a saving of 25%.  If the company spent £100,000 on R&D projects in a year then its corporation tax liability would reduce by up to £25,000.

Loss Making SME’s

A loss-making SME can also benefit from a cash injection.  The formulae for a loss-making company is different to the profitable company and the benefit received is a R&D Credit.

Essentially the loss-making company gives HMRC a £1 of loss in return for 14.5p.  This may should a bad deal but if the loss was carried forward against future profits at a 17% tax rate the company eventually in the future would only be getting 17p for its £1 of loss.  The deal doesn’t seem so bad after all.

The loss-making formulae actually works out that a benefit of c33% can be obtained.  If the company spent £100,000 on R&D projects in a year then its potential R&D Credit would be £33,350.

Large Companies RDEC

Profitable and loss making large companies equaly can benefit, both potentially obtaining a R&D Credit of 9.7% of their R&D spend.

If the company spent £100,000 on R&D projects in a year then its potential R&D Credit would be £9,700.


The area of subcontractors and the inclusion of their costs within the R&D claim can be complex. SME and RDEC subcontractors have different rules and heavily depend on several aspects.

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Working with R&D Tax Solutions enables your service offering to be extended without jeopardising client service or quality. We are the trusted tax partner for a variety of businesses. Our team enables the partnerships to flourish with clear transparency of services provided and benefits obtained. Whether you are a boutique consultancy with a select few clients, or an accounting practice with a wide variety of clients our team will give you the peace of mind that your clients interests are our priority.

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0161 298 1010