R&D Tax Relief Claim Rates
The rules and regulations around R&D tax relief change frequently, so it can be difficult to stay current and estimate your possible claim accurately. The amount you can reclaim changes significantly depending upon the scheme you can claim under, which is influenced by the size of your business, your profitability, what you've spent cash on and when.
All businesses are unique and have their own complexities to their claims, so there is no substitute for engaging with experts like us to fully appraise your claim to generate the highest possible claim values.
What schemes are available?
Claims for R&D tax relief can span multiple financial years, consequently attracting differing rates of relief, making calculations quite hard for the uninitiated.
Let's address them one by one.
For claims up to 1st April 2024
Schemes
You will claim under one of two schemes; SME (for small-to-medium businesses) and RDEC (or 'research & development expenditure credit', for large businesses). The schemes both have different rates of relief depending upon your company's state of profitability, and different rates depending upon which financial year you are claiming for prior to April 2024.
It is important to note that rates of relief fell quite significantly under the SME scheme from April 2023, as detailed in the table below. Conversely, rates of relief improved under the RDEC scheme.
Eligibility
To be classified as an SME, your business must:
- Employ under 500 staff, and
- Turnover less than €100m annually
To be classified as a large business to claim under the RDEC scheme, your business must:
- Employ over 500 staff, or
- Turover more than €100m annually
For claims after 1st April 2024
Schemes
You will claim under the newly merged scheme as announced in the Autumn Budget 2023. For all claims from April 2024, the SME and RDEC schemes will be simplified and merged into one, all-encompassing scheme to run alongside the R&D 'Intensive' scheme that came into effect in from April 2023.
R&D 'Intensive' SME scheme
In the Spring Budget 2023, the chancellor announced a new scheme that would benefit R&D ‘intensive’ SMEs with greater rates of relief against their qualifying R&D expenditure. This enabled SMEs that dedicated over 40% of their annual expenditure towards R&D to claim rates of relief that can be almost double those seen under the regular SME scheme.
The scheme was retained in the Autumn Budget 2023, with the 40% as mentioned above eligibility threshold reduced to 30% from April 2024. It is estimated this threshold reduction will enable a further 5,000+ businesses to claim the enhanced rate of relief.
Claim Rates
| Comapny Type | Claim Pre 1st April 2023 | Claim from 1st April 2023 to 31st March 2024 | Claim from !st April 2024 | +/- |
| SME - Profit Making | 27.4% | 16.34% | 15% | -8% |
| SME - Break even (Non-R&D Intensive) | 18.85% | 8.6% | 16.2% | +88% |
| SME - Loss-making (Non-R&D Intensive) | 33.35% | 18.6% | 16.2% | -13% |
| SME - Break even (R&D Intensive) | 18.85% | 12.47% | 12.47% | 0% |
| SME - Loss-making (R&D Intensive) | 33.35% | 26.97% | 26.97% | 0% |
| Large Company - Profit-making | 10.53% | 15-16.2% | 15-16.2% | 0% |
| Large Company - Loss-making | 10.53% | 15% | 16.2% | +8% |
Confused? That's what we're here for.
Frequent changes to the schemes mean it can be difficult to correctly calculate or position a successful claim for R&D tax relief, which is where our expert consultants come in.
With a 99% success rate and average SME claims of over £50,000, book your risk-free, no-obligation consultation to see if we can help your business reap the rewards of its innovation. We'll do the legwork of your claim whilst ensuring compliance with all current HMRC guidance, rules and regulations.
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Ready to see the fruits of your labour? Begin your R&D tax credit journey with us now. Whether this is your first time or you've applied before, Yuzu has got you covered. Start growing today.
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