Answers · UK 2025/26
What is the R&D tax credit rate in the UK for 2026/27?
From April 2024, most companies use the merged R&D Expenditure Credit (RDEC) scheme at 20% above-the-line credit. R&D-intensive SMEs (R&D spend at least 30% of total costs) that are loss-making can claim 27% under the Enhanced R&D Intensive Support (ERIS) scheme.
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The UK R&D tax relief regime was fundamentally reformed from April 2024, merging two previously separate schemes into a single RDEC regime (with an enhanced option for qualifying SMEs). Merged RDEC Scheme (from April 2024): - Rate: 20% above-the-line credit - Applies to: all companies that previously used the large company RDEC scheme, AND most SMEs (the old SME R&D Relief scheme is abolished for accounting periods starting on or after 1 April 2024) - The 20% credit is included in profit before tax, reducing the effective cost of R&D. Net benefit after corporation tax at 25%: effectively 15p per £1 of qualifying R&D spend (20% credit x 75% retention after tax) Enhanced R&D Intensive Support (ERIS): - Rate: 27% above-the-line credit - Applies to: loss-making SMEs where qualifying R&D expenditure is at least 30% of total expenditure (R&D intensity threshold) - Net benefit (loss-making company, surrendered for payable credit): approximately 27p per £1 of qualifying R&D spend What qualifies as R&D expenditure: - Staff costs (employees and subcontractors working on R&D) - Externally provided workers - Software - Consumables (materials, utilities used directly in R&D) - Clinical trials volunteers - From April 2023: pure maths is included; overseas R&D costs are restricted (must be incurred in the UK unless specific conditions are met) Claiming: - Claim via the CT600L supplementary form with the corporation tax return. - Advance notification to HMRC now required for new claimants within 6 months of the end of the accounting period. Anti-fraud measures: - HMRC has significantly tightened compliance, including requiring a named senior officer to sign off the claim and detailed claim support reports.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.