What is the merged R&D expenditure credit?
The merged R&D expenditure credit is the single British research scheme that replaced the separate SME and RDEC routes for accounting periods beginning on or after 1 April 2024. It pays a taxable credit at 20%.
| Rate | A taxable expenditure credit of 20% of qualifying R&D spend source |
|---|
What it means in practice
Because the credit is taxable, the cash effect is closer to 15% than to 20%. A loss-making small company whose R&D is at least 30% of total spend can use the enhanced intensive route instead, which pays £27 for every £100 of R&D investment. HMRC scrutinises software claims closely, so budget for the evidence rather than only for the claim.
Who it applies to
UK companies with genuine technical uncertainty in their work. Routine development, however difficult, generally does not qualify.
Working out what a Turkish company would claim on the same spend? Put your numbers in the calculator.