RDEC Scheme

Who Can Claim RDEC? 

RDEC (Research & Development Expenditure Credit) supports UK companies subject to Corporation Tax that carry out qualifying R&D activities. Both profit-making and loss-making companies can claim.

Quick Eligibility Overview

You can claim RDEC if your company is a large business.

SMEs can claim RDEC if they are subcontracted to carry out R&D work, if their project received notified State Aid, or if their costs have been subsidised by a grant or other support.

If these don’t apply, you might still be able to claim under the SME R&D tax relief scheme.

To Qualify Your Company Must:

• Be trading and liable to UK Corporation Tax.
  
  
• Run a project that meets the official R&D definition.
  
  
• Have qualifying R&D costs.

What Costs Qualify?

✔ Eligible costs include:

Staff who are directly involved in R&D, consumables and materials used, utilities and some overheads, software and data licences, and subcontracted R&D costs (subject to conditions below).

Subcontracted R&D and Location Rules

For accounting periods before 1 April 2024, subcontracted R&D costs can be claimed only if the work was contracted to your company by a large company or a person not liable to UK Corporation Tax (see CTA09/1134(3)(e), CTA09/1136(3)).

From 1 April 2024, only the company that decides to carry out the R&D can claim the relief, regardless of any subcontracting (see CTA09/1138A(2)).

To qualify for a subcontracted claim, your company must demonstrate it planned and decided on the R&D independently of the company you are working for. Payments to contractors normally qualify when the R&D takes place in the UK, though some exceptions for overseas R&D exist under the same legislation.

To explore our full range of Research & Development tax services , visit the Innovation Tax Reliefs page.

📞 Contact Tax Advisory Partnership using the form at the bottom of the page for specialist advice on the RDEC scheme and all aspects of research and development tax credit UK.