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RDEC Scheme

Businesses that are above the SME limits are eligible to apply for relief through the RDEC scheme. At RDS we have a dedicated RDEC team in place to help navigate through the HMRC scheme.

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No upfront fee

Until the claim is successful

£0million+

Unlocked for our clients

£0+

Average UK claim amount

RDEC Scheme Explained

RDEC (research and development expenditure credit) is a UK government tax incentive designed to reward innovative companies for investing in research and development (R&D). It is primarily used by large companies and is also used by SMEs in some circumstances. A list of the condition’s companies claim under the RDEC incentive are:

500 or more employees

Annual turnover of more than €100m and an annual balance sheet total of more than €86m.

Being in receipt of grants/funding (notified state aid, de-minimis funding etc.) can also force an SME to claim under the RDEC incentive. 

Being an SME within a larger group structure that causes the company to fall under the RDEC incentive.

RDEC Rate

The R&D Expenditure Credit rate has increased multiple times since its incorporation, it increased to 13% in April 2020 and will move to 20% for expenditure incurred on or after 1st April 2023. 

Difference to the SME scheme

Unlike the SME scheme, RDEC can be accounted for as an above-the-line credit in a company’s income statement (also known as the profit-and-loss account), providing a positive impact on visible profitability in a company’s accounts. This visibility in turn has a positive impact on R&D investment decisions.

Since RDEC is independent of a company’s tax position, the benefit received is easier to forecast. This provides far greater stability and makes it easier for large companies to factor the relief into their investment decisions.

Unlike its predecessor, the large company scheme (defunct as of 1 April 2016), RDEC can also be used by loss-making companies, as well as profit-making ones.

Claimable costs

Here's what you can claim for RDEC:

Staff costs (Gross Salaries, Employer’s NI Contributions, Employer’s Pension Contributions).
Relevant payments made to agencies to provide staff for a project (restricted to 65%, further restricted by deployment if applicable).
Consumables (materials used up during R&D and utilities).

Some subcontractor costs are also allowable if they are directly undertaken by one of the following:

A charity.
A higher education institute.
A scientific research organisation.
A health service body.
An individual or partnership of individuals (but not limited companies).

If the company have subcontractor costs that meet the above definition, we can include 100% of the expenditure in the RDEC claim.

Sectors

We have helped businesses across a range of sectors claim R&D tax credits for their innovative work.

Our Claim Process

Assessment

An initial phone call or face-to-face meeting is typically the first step, so that one of our Business Development Managers (BDM’s) can discuss potentially qualifying R&D projects with you & explain the activities that can be included within an R&D claim.

Analysis

Following a successful eligibility check, our team will officially engage with you & request the straightforward financial information required from you and your accountant in order to analyse the R&D costs. A report call / meeting will also be carried out so that a justification report can be created.

Report & Sign Off

Once the claim financials and report have been completed, our team will liaise with you to discuss the final claim and get feedback from you & a confirmation that all eligible activity has been included. Following the review and claim sign off, we will submit the information to your accountant.

CT600 Submitted

One of the benefits of our approach is that we don’t tread on the toes of your accountant by taking over as your ‘agent’ with HMRC. We pass over the completed claim info to your accountant so that they can alter your corporation tax return (CT600) to include the figures, and also attach the report for HMRC.

Funds Received

By creating a comprehensive justification report & detailing the figures included within the claim, the process of HMRC reviewing the submitted info and approving the claim should be quite quick - typically taking 4-6 weeks. You will receive your benefit directly from HMRC, we then purely bill you upon success.

Case Studies

At RDS we have helped over 1000 companies successfully claim. Below is just a sample of some recent R&D tax credit claims we have completed.

Manufacturing

Lift Company

Client Benefit: £120,000

Logistics

Logistics Company

Client Benefit: £61,000

Food & Drink

Brewing Equipment

Client Benefit: £55,000

Manufacturing

Lighting Manufacturer

Client Benefit: £180,000

Software

Fleet Management

Client Benefit: £500,000

View more

Frequently asked questions

Below are some of the most frequently asked questions we get regarding making an R&D tax relief claim. If you have any more questions please contact our team.

We apply a straightforward, easily comprehensible process to all of our client claims. Our team will work hard to ensure that your claim meets the stringent requirements set by HMRC, from analysing and calculating the claim value to creating the research and development justification report.

You will have an initial telephone call or visit from one of our team to discuss whether your company meets the R&D claim requirements, before we progress the claim on a no win no fee basis.

A member of our specialist team will visit your business to gather relevant data and get a full understanding of your operation. The specialist advisor will scope your business in detail, identifying the extent of your qualifying activity and expenditure thus ensuring that we are able to maximise your claim.

The RDS team will produce a detailed R&D report, describing R&D activity within your business and justifying how this meets HMRC guidelines, along with a summary of qualifying R&D spend. We will then send the report to your accountant with instructions for submitting the claim to HMRC via the CT600 ‘Corporation Tax: Company Tax Return’ claim form.

It usually takes 28 days for HMRC to process the claim following submission of the CT600, after which you will receive your benefit.

In the case of an HMRC query, one of our specialists will respond immediately to ensure minimal delays in your claim.

Ready to get started?

With three UK office locations we are always on hand for a call or to meet in person. Start your journey with RDS today.

Start your claim

0330 055 0047