The UK’s Research & Development Expenditure Credit (RDEC) scheme helps businesses recover a portion of their qualifying R&D spend. From April 2024, RDEC became the foundation of a new merged R&D tax relief scheme, making it the default route for most UK companies. RDEC still applies in its original form to certain historic claims, and for R&D-intensive SMEs, Enhanced Research & Development Intensive Support (ERIS) may offer additional benefit.
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What is the RDEC scheme?
Originally introduced in 2013, RDEC was the primary R&D tax relief scheme for large companies and also applied to SMEs under specific conditions (such as receiving grant funding or subcontracted R&D work).
RDEC operates as an above-the-line credit, meaning the benefit appears in your profit and loss (P&L) statement. This improves EBITDA, attracts investor visibility, and offers a consistent way to show innovation-driven value.
Under both the historic and current merged regimes, RDEC remains a taxable credit at 20%, typically resulting in a net benefit of 15%.
Who can claim through RDEC, and when?
Before April 2024
You may still be eligible to claim under the original RDEC scheme for earlier accounting periods if your company:
- Is a large business (≥500 staff, and either >€100m turnover or >€86m gross assets)
- Is an SME that:
- Received a notified grant or state aid for the R&D project
- Conducted subsidised R&D
- Was subcontracted by a large company
After April 2024
All companies now fall under the merged R&D tax relief scheme, which uses the RDEC model as its foundation.
Key changes include:
- A standard 20% credit (net ~15% after tax).
- The introduction of the Claim Notification Form (CNF), required for most first-time or returning claimants, submitted within six months of period-end.
- Access to ERIS for R&D-intensive SMEs meeting eligibility thresholds.
We’ll assess which rules apply to your situation and guide you through the right route.
FAQs
RDEC was introduced in April 2013, replacing the large company scheme. While originally designed for large businesses, it now also supports SME claims.
HMRC defines R&D for tax purposes in broad terms. To qualify, a project must aim to make an advance in science or technology, attempt to resolve scientific or technological uncertainty, and involve investigative work that competent professionals couldn’t easily resolve.
Eligible work spans nearly every sector including construction and engineering, IT and technology, food and beverage, manufacturing, and life sciences. Projects might include new product development, system or process improvements, or sustainability initiatives. Even internal or routine projects can qualify if they aim to advance a field of science or technology by resolving scientific or technological uncertainties and overcoming associated technical challenges.
Start by identifying eligible R&D activities and associated costs like staff time, materials, and software. You’ll need to assess these against HMRC’s criteria and calculate the total qualifying expenditure.
The claim is submitted through your Corporation Tax return, along with supporting technical and financial documentation. We can support the entire process from identifying opportunities to preparing audit-ready submissions, making your claim stronger and easier to manage.
Your qualifying R&D expenditure is multiplied by 20%, with 25% tax applied to the credit. That gives a typical net benefit of 15%. For example:
- £100,000 × 20% = £20,000 (gross credit)
- £20,000 – 25% tax = £15,000 benefit
No, it’s a tax relief. However, companies that receive grants can still claim RDEC (though usually not the SME scheme).
Yes. You can submit a claim for up to two completed accounting periods under the previous SME or RDEC schemes.
For newer claims under the merged scheme, you must also submit a Claim Notification Form (CNF) within six months of the end of the relevant accounting period or your claim won’t be accepted, even if you meet other eligibility criteria.
Expertise
How we can help
With Ayming as your partner, you’ll benefit from:
- Collaborative planning to align on objectives and review prior claims
- Expert-led data analysis to identify qualifying R&D activities and costs
- Technical interviews to assess eligibility and prepare supporting documentation
- Detailed financial analysis and audit-ready cost breakdowns
- Clear, HMRC-compliant claim reports and end-to-end support through submission and review
We work closely with your technical and finance teams without taking up too much of their time. To unlock the full value of your R&D spend, speak to our tax and innovation experts today.
Recover valuable cash by claiming tax relief on eligible innovation and development activities.
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