SME R&D relief—additional deduction (pre-1 April 2024)

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Produced in partnership with David O’Keeffe of Aiglon Consulting
Practice notes

SME R&D relief—additional deduction (pre-1 April 2024)

Copyright © 2025 LexisNexis

Produced in partnership with David O’Keeffe of Aiglon Consulting

Practice notes
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This Practice Note is about the main Research and development (R&D) relief scheme for small or medium-sized enterprises (SMEs) for accounting periods beginning before 1 April 2024 (subject to transitional provisions). For further information, see Practice Note: SME R&D relief—tax credit (pre-1 April 2024).

For information about the R&D expenditure credit scheme that applies for accounting periods beginning before 1 April 2024, see Practice Note: R&D expenditure credit (pre-1 April 2024). Together, these two schemes are referred to in this Practice Note as the pre-1 April 2024 schemes.

For information about the schemes of relief for R&D generally applying for accounting periods beginning on or after 1 April 2024, see Practice Notes: The merged R&D expenditure credit (post-1 April 2024) and Enhanced relief for R&D-intensive loss-making SMEs (post-1 April 2024).

SME R&D relief—additional deduction

A company that is a SME can, provided certain conditions are met, claim a deduction equal to 186% of its qualifying expenditure incurred on research and development (R&D) in calculating its profits subject to corporation tax.

The deduction

David O’Keeffe
David O’Keeffe

Specialist Tax Adviser, Aiglon Consulting

I am an independent specialist adviser on the taxation of innovation, advising companies and other advisers on areas such as R&D tax relief, Patent Box and Creative Industry reliefs. 

I am a member of the London Society of Chartered Accountants’ tax committee as well as CIOT’s Corporation Tax technical Committee (and chair the R&D Working Group of that committee).

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