R&D Tax Credit Calculator
What your company actually receives under the merged RDEC scheme or enhanced R&D intensive support, after the tax that most calculators leave out.
Your R&D figures
Staff, subcontractors, software, consumables and data or cloud costs that meet HMRC's definition of R&D.
Include connected companies. This sets your R&D intensity.
Between £50,000 and £250,000 of profit, Marginal Relief gives an effective rate in between. Only the merged scheme credit is taxed.
Which scheme
Enhanced R&D intensive support
A loss-making SME with R&D at 30% or more of total expenditure. The payable credit is not liable to Corporation Tax.
ERIS threshold is 30%.
You receive
27.0% of qualifying spend
Gross credit
14.5% of surrenderable loss
Corporation Tax
ERIS credit is not taxed
PAYE cap
Enter PAYE and NIC to apply
£100,000 of qualifying spend gives an extra 86% deduction of £86,000, a surrenderable loss of £186,000, and a payable credit of £26,970 at 14.5%. That credit is not liable to Corporation Tax.
Where the credit goes
R&D intensity
Breakdown
| Qualifying R&D spend | £100,000 |
| Gross credit | £26,970 |
| Surrenderable loss | £186,000 |
| You receive | £26,970.00 |
PAYE and NIC liabilities were not supplied, so the PAYE cap has not been applied. Your actual credit may be lower.
No trading loss figure was supplied, so this assumes the unrelieved loss is at least 186% of qualifying spend. That gives the maximum payable credit.
Key takeaways
- The merged RDEC credit is 20% of qualifying spend, but it is taxable, so the real benefit is about 15% at the 25% Corporation Tax rate.
- ERIS is worth up to 26.97% of qualifying spend and is not taxed, but only a loss-making SME with R&D at 30% or more of total spend can claim it.
- The PAYE cap is £20,000 plus 300% of your PAYE and NIC. Merged scheme excess carries forward rather than being lost.
- You cannot claim both schemes on the same expenditure.
How much R&D tax relief can you claim?
The scheme you fall into decides the rate, and the two are not comparable on their headline numbers because only one of them is taxed.
| Scheme | Headline | Taxable | Net on £100,000 |
|---|---|---|---|
| Merged RDEC, 25% CT | 20% | Yes | £15,000 |
| Merged RDEC, 19% CT | 20% | Yes | £16,200 |
| ERIS, loss-making intensive SME | 14.5% | No | £26,970 |
The two schemes
Merged RDEC scheme
The merged scheme is the default. Any trading company chargeable to Corporation Tax with a project meeting HMRC's definition of R&D can claim it, whatever its size or profitability. The rate is 20% of qualifying expenditure.
The detail that catches people out is that this credit is taxable. HMRC treats it as trading income, so the cash value depends on your Corporation Tax rate. At the 25% main rate a 20% credit is worth 15% of spend. At the 19% small profits rate it is worth 16.2%. Different rates apply to ring-fenced oil, gas and mining trades, which this calculator does not cover.
Enhanced R&D intensive support
ERIS is narrower and more generous. A company has to clear all three tests at once.
You can claim ERIS if
- You meet HMRC's SME definition
- You make a trading loss before the extra deduction
- R&D is 30% or more of total expenditure
- Your accounting period began on or after 1 April 2024
You cannot if
- You are profit-making, whatever your intensity
- You are a large company
- R&D is under 30% of total spend
- You already claimed merged RDEC on the same costs
A qualifying company deducts an extra 86% of its qualifying costs on top of the 100% already in the accounts, giving a 186% total deduction. It can then surrender the resulting loss for a payable tax credit worth up to 14.5% of the surrenderable loss. Multiply those together and the ceiling is 1.86 times 14.5%, or 26.97% of qualifying spend.
The PAYE cap
Under either scheme the credit received in an accounting period cannot exceed £20,000 plus 300% of the company's relevant PAYE and National Insurance liabilities, unless the company is exempt. The schemes behave differently when it bites: merged scheme excess is carried forward as an expenditure credit for the next period, so it is deferred rather than lost.
Worked examples
A profitable software company
- Qualifying R&D spendTotal expenditure £600,000
- £100,000
- R&D intensityBelow 30%, so no ERIS
- 16.7%
- Merged RDEC at 20%
- £20,000
- Corporation Tax at 25%
- £5,000
- Net benefit
- £15,000
A loss-making research startup
- Qualifying R&D spendTotal expenditure £120,000
- £100,000
- R&D intensityWell over 30%, so ERIS applies
- 83.3%
- Extra 86% deduction
- £86,000
- Surrenderable loss
- £186,000
- Payable credit at 14.5%, untaxed
- £26,970
The same startup, capped
- PAYE and NIC for the periodA small payroll
- £2,000
- PAYE cap, £20,000 plus 300%
- £26,000
- Credit restricted to
- £26,000
Four things that go wrong
- 1Quoting 20% as the benefitThe merged scheme credit is taxable. At the main rate the real figure is 15%, a quarter less than the headline.
- 2Assuming loss-making means ERISA loss-making SME still needs R&D at 30% or more of total expenditure. Miss that and you are on the merged scheme.
- 3Forgetting connected companies in the intensity testTotal expenditure includes connected companies worldwide, which can push you under the threshold.
- 4Ignoring the PAYE cap on a small payrollA company with contractors rather than employees can find most of its credit capped.
What this calculator does not do
- It does not compute Marginal Relief for profits between £50,000 and £250,000. See HMRC's Marginal Relief guidance.
- It does not apply the separate rules for SMEs registered in Northern Ireland claiming ERIS.
- It does not cover ring-fenced trades.
- It does not decide whether your project meets HMRC's definition of R&D. That test comes first, and it is the one most claims fail.
Every rate used here is listed with its source on the methodology page. Rates were last verified on 2026-08-14. This is an estimate, not tax advice.