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R&D Tax Credit Calculator: Find out how much you’re owed

Posted on April 15, 2022

When it comes to working out how much R&D Tax Credits you may be eligible to claim, using our Tax Credits Calculator is the quickest and most efficient way to do this. The R&D Tax Credits scheme is a government incentive designed to reward businesses who are spending money on innovation, the aim is to boost overall spending within the private sector by businesses in Research & Development projects.

If your business spends money on creating or improving products and services, then it will most probably be eligible to claim R&D Tax Credits, but what else makes you eligible to claim R&D Tax Credits?

To be eligible for the R&D Tax Credits scheme, your business must:

  • Be a limited UK company that is subject to
  • Be seeking to advance a scientific or technological uncertainty within your industry
  • Have spent money on R&D projects in the last 2-3 years

How much can I claim?

If you are claiming through the SME R&D Tax Credits scheme, then the amount that you will be able to claim will depend on your business’s financial position. 

  • If your business is profit-making, then you will be eligible to receive up to 25% credit back from your qualifying R&D expenditure.
  • If you are a loss-making business, then you could receive up to 33.35% back. If your business is loss-making, the amount that you receive will be calculated from the combination of your enhanced R&D expenditure and trading loss, with a 14.5% rate applied, this means that the greater your business’s loss, the higher amount of R&D Tax Credit you will receive.
  • If your business is a break-even company, then you could receive up to 18.85% of credit back. For all SME claims, HMRC enhances your R&D expenditure up to 130% of it’s value, an example of this would be if your business spends £80K on R&D, then the enhanced R&D expenditure would total at £110K.

What sectors can claim R&D Tax Credits?

Businesses operating in many different sectors utilize the R&D Tax Credits scheme, as long as your UK business is spending money on creating new products or services, improving ones that already exist or extending it’s overall knowledge in their desired field, then you will most probably be eligible.

Some of the top claiming industries are:

  • Manufacturing
  • IT & Software
  • Engineering
  • Retail
  • Administration

To see more industries that are eligible to claim through the scheme before using our R&D Tax Credit calculator, click here.

Example R&D Calculations

If you would like a more in-depth explanation of how to calculate R&D yourself instead of using our R&D Tax Credits calculator, then we have compiled some examples to further explain this:

Profit-making SME with £200,000 innovation spend, £20,000 profit and Corporation Tax liability of £3,800:

£200,000 x 130% = £260,000 enhanced R7D expenditure

£20,000 – £260,000 = -£240,000

This means that the reduced Corporation Tax bill would be £0, and the Corporation Tax saving would be £3,800. An additional R&D Tax Credit would be awarded of £34,800.

Loss-making SME with a £50K trading loss, that has spend £100K on R&D:

£50,000 x 130% = £130,000 R&D Enhancement 

Combined R&D enhanced expenditure and trading loss: £50,000 + £130,000 = £180,000. 

Credit: £180,000 x 14.5% = £26,100

Using our R&D Tax Credits Calculator

The quickest, easiest and most accurate way of finding out the projection of how much your claim could be worth, is by using our R&D tax credit calculator. The calculator itself will only require you to state whether you are a profit-making or loss-making business, and how much money you spend yearly on R&D. 

Once you have used this calculator, we advise that you speak with a specialist so that they can further advise you about your claim. Our specialists only offer services related to R&D Tax Credits, so they are true experts within the field. Contact us today.