This guidance note provides information on how research and development expenditure credits (RDEC) are calculated and utilised. The Qualifying expenditure for R&D tax relief guidance note provides information on what expenditure qualifies for RDEC.

The RDEC is a taxable credit which is payable to the company in accordance with the seven steps set out below.

For accounting periods beginning on or after 1 April 2024, RDEC can be claimed by a company of any size which carries on a trade. Loss-making R&D intensive small and medium-sized enterprises (SMEs) can, however, claim under the SME intensive scheme, as an alternative. See the Research and development SME tax reliefs guidance note for more on the SME intensive scheme.

For accounting periods beginning before 1 April 2024, RDEC is primarily for large companies and the SME scheme applies to SMEs. Where an SME cannot claim SME R&D relief on qualifying expenditure because it is capped, subsidised or subcontracted out to the SME, it may instead be able to claim under RDEC. For details of the restrictions