R&D Tax Credit Calculator

Welcome to R&D Tax Credit calculator.

This simple tool will help you estimate how much R&D Tax Relief or how large an R&D Tax Credit – your company could be entitled to.

To find out how much you can claim, check out our free and easy R&D Tax Credit calculator.

Answer 4 quick questions to see how much your company can claim.

1. How much have you invested in R&D?

2. Please select the year of investment

3. Are you a Start-up, SME or a Large company?

Start-up SME Large Company

4. Are you a loss-making, break even or profitable company?

Profitable Loss-making Breaking even

How We Calculate Your Potential R&D Tax Credit Claim Size

Are you curious about R&D Tax Credit and how it could benefit your business? At Price & Accountants, we understand that navigating the world of tax incentives can be a daunting task. That’s why we’re here to break it down for you in simple terms. In this article, we’ll explain how we, as R&D Tax Credit Specialists, calculate your potential R&D Tax Relief claim size, so you can take full advantage of this valuable opportunity.

1. The Size of Your Total Qualifying Expenditure

R&D Tax Credit is all about rewarding innovation. It works by reimbursing you a percentage of your expenditure on qualifying costs such as wages and raw materials. So, the first key factor in determining your potential tax relief or cash credit is the size of your total qualifying expenditure.

2. Which of the Two Schemes Your Company Applies To

When it comes to how to calculate R&D tax credits, it’s important to know that R&D Tax Relief comes in two flavors: SME R&D Tax Relief and the Research and Development Expenditure Credit (RDEC). Let’s keep it simple:

Under the SME scheme, you can reclaim up to 33.35% of your total eligible expenditure. This scheme is ideal for small and medium-sized businesses looking to supercharge their innovation efforts.
Under the RDEC scheme, you can reclaim up to 10.5%. The beauty of RDEC is that relief rates remain constant, regardless of your financial situation.

3. Your Company’s Financial Situation

Your company’s financial situation plays a significant role in the R&D Tax Credit calculation, as we explain with an R&D calculation example:

Loss-making companies can claim up to 33.35% of their costs back through the SME scheme. This is a significant boost for businesses that are investing heavily in research and development, even if they haven’t yet turned a profit.
Profitable companies can reclaim up to 24.7%, making R&D Tax Relief an attractive proposition for businesses that are already seeing success.
Companies breaking even can still benefit, with the potential to reclaim 18.85% of their eligible costs.

So, if you’re wondering how to calculate R&D tax credits or searching for an R&D tax credit calculator HMRC, you’ve come to the right place. Understanding R&D tax credits percentage and the intricacies of the R&D calculation is what we do best.

In conclusion, understanding how R&D Tax Relief is calculated can make a world of difference for your business. It’s about recognizing the value of your innovation and being rewarded for it. We’re here to simplify the process, so you can focus on what you do best – innovating and growing your business. If you’re curious about your potential SME R&D Tax Credit claim size, reach out to us today, the R&D Tax Credit Specialists, and let’s embark on this exciting journey together.

Frequently Ask Questions:

1. How to Calculate R&D Tax Credit?

Calculating R&D tax credits is like putting together a puzzle of your innovative activities. First, gather all costs related to your R&D work – think of your team’s time, any software or materials used, and even some outside experts if they helped. Then, add these up to find your total R&D spend. The exciting part? For small and medium-sized businesses, you can boost this amount by 186% to figure out your R&D tax relief. It’s a way of giving your innovation efforts a high-five in financial terms!

2. What is the R&D Tax Credit Percentage?

Think of R&D tax credit percentages as a reward rate for your innovation. For the tax years 2022/23 and 2023/24, these rewards are set at 14.5% and 10%, respectively. It’s like getting a bonus for every pound you spend on developing new things!

3. How Far Back Can You Claim R&D Tax Relief?

Missed claiming your R&D tax relief? No worries! You’ve got a two-year window to claim it. For instance, if your accounting year wrapped up on 31st December 2021, you have until the end of December 2023 to claim. It’s like a time-travel opportunity to grab benefits you might have missed!

4. What are the Criteria for R&D Tax Credits?

Qualifying for R&D tax credits isn’t just about lab coats and test tubes. It’s about stepping into the unknown in science or technology. Whether you’re improving a process, developing new software, or solving a tricky technical problem, it’s all about pushing boundaries. If you’re doing something that makes you scratch your head and think hard, you’re likely on the right track!

5. Are R&D Tax Credits Only for Large Companies?

Big or small, R&D tax credits don’t discriminate. They’re here for all businesses that dare to innovate. Whether you’re a start-up in a garage or a big player in the market, if you’re investing in new ideas, these credits are for you.

6. Can Failed R&D Projects Still Qualify for Tax Credits?

Good news – even if your R&D project didn’t cross the finish line, your investment in it hasn’t gone to waste. The costs you incurred in giving it a shot still count towards tax relief. It’s like getting a pat on the back for trying something bold, even if it didn’t work out.

7. Does R&D Tax Relief Apply Only to Product Development?

R&D tax relief isn’t just about creating new products. It’s also for those times when you’re finding new ways to do things, like improving a process, coding fresh software, or solving a technical puzzle. If it’s new, innovative, and a bit challenging, it likely counts!

8. What Documentation is Needed to Support an R&D Tax Relief Claim?

When claiming R&D tax relief, think of documentation as your storybook of innovation. Keep track of everything – from the time your team spent, the materials used, to any expert advice you sought. Detailed reports explaining your R&D journey can be super helpful. It’s like keeping a diary of your adventure in innovation!

9. Can I Claim R&D Tax Relief if My Company is Not Profitable?

Even if your business isn’t in the green yet, your R&D efforts won’t go unnoticed. You can still claim R&D tax relief and get a tax credit or a deduction for future tax dues. It’s like getting a financial thumbs-up for your hard work, regardless of your current profit status.