Research and development expenditure credit (RDEC)

Produced by Tolley in association with Will Sweeney

Corporation Tax

Guidance

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.

See also Simon’s Taxes, D1.417, D1.435A.

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 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, then it may instead be able to claim under RDEC. For

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Will Sweeney

Senior R&D Manager, Menzies LLP , Corporate Tax

Will Sweeney is a Senior R&D Manager in the Innovation & R&D team at Menzies where he looks after many of their largest clients. He has extensive experience of helping entrepreneurial clients to optimise their tax position throughout the innovation lifecycle by advising on issues including R&D tax credits, RDEC, Creative Sector reliefs and the Patent Box.In addition to his tax knowledge, Will started his career as an engineer and has worked with numerous technology, manufacturing and property sector clients. He brings a wealth of industry experience to his clients, helping him to understand the specific technical details of work undertaken by clients.Will contributes to TolleyGuidance Corporate module.

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Research and development expenditure credit (RDEC)