Read about Labour’s business tax plans and vision for UK innovation. Click here for detailed insights.

R&D SME Scheme

Our team can help small to medium enterprises claim valuable research and development tax credits through HMRC’s R&D SME Scheme.

Find out how much you can claim!
Request our April 2023 R&D Changes Resource Toolkit

    Your request has been received, and the toolkit will be delivered to your inbox shortly. Thank you.

    Is the SME R&D Scheme right for my business?

    If you’re a small/medium enterprise carrying out R&D and looking for tax relief, HMRC needs to see that you meet these key thresholds:
    ·       Staff headcount is less than 500
    ·       Turnover is less than €100m, or your balance sheets total less than €86m (regardless of your headcount).*

    *You will need to convert turnover from sterling to euros.
     
    If you pass these criteria, and you’re a UK limited company that’s subject to UK corporation tax, then it’s likely that you’ll qualify. If you don’t meet these criteria, but you’re still conducting R&D, you can still look to claim under the Research and Development Expenditure Credit (RDEC).

    How much can I claim under the R&D SME Scheme?

    Before April 2023 expenditure

    For expenditure before April 2023, the R&D SME Scheme allows companies to claim up to 33% of research and development costs. This is because if your SME is profitable, you can deduct an extra 130% of qualifying R&D costs from yearly profits. This is on top of the normal 100%, making a total 230% deduction. If you’re not profitable, that’s also okay! If you are loss making, you can claim up to 14.5% of the surrenderable loss.

    April 2023 changes

    For expenditure on or after April 1 2023, the additional deduction for SMEs will decrease from 130% to 86%, and the SME R&D Tax Credit rates will reduce from 14.5% to 10%. If, however, your company is loss making but classed as R&D intensive (where qualifying R&D spend adds up to at least 40% of total spend) you’ll still be able to claim using the 14.5% credit rate.

    Try our R&D Tax Calculator and find out how much you can claim

    The calculator is suitable for SMEs who make a profit and pay corporation tax, make a profit and don’t pay corporation tax, or for those who make a loss. It considers several factors when calculating your potential benefit. For example, wages, cost of materials, software licences etc. Don’t worry if you don’t have all of the exact figures to hand! This tool will give you an example calculation of your savings through R&D Tax Relief – so estimating your costs is fine!

        £ 00,000.00*

        *Please note that the estimates provided by this R&D calculator are based on the information you have provided and should not be solely relied upon for making a claim for Research and Development (R&D Tax Credits). The calculator does not fully account for all factors that could affect your eligibility for these credits, and the information provided is of a general nature and should not be construed as legal, accounting, or tax advice. It is recommended that you seek advice from a qualified professional for specific guidance on your unique situation. Use of this calculator is at your own risk.

          Thank you for using our R&D calculator!

          One of our R&D experts will reach out to you to schedule a call in the next 48 hours.

          *Please note that the estimates provided by this R&D calculator are based on the information you have provided and should not be solely relied upon for making a claim for Research and Development (R&D Tax Credits). The calculator does not fully account for all factors that could affect your eligibility for these credits, and the information provided is of a general nature and should not be construed as legal, accounting, or tax advice. It is recommended that you seek advice from a qualified professional for specific guidance on your unique situation. Use of this calculator is at your own risk.

          How does an R&D project qualify for the SME Scheme?

          To qualify for the R&D SME Scheme, your project must:

          ·      Look for an advance in science and technology
          ·      Face uncertainty with achieving this advance
          ·      At least have tried to overcome the uncertainty
          ·      Not be easily worked out by a professional in the field

          What costs are eligible for tax relief under the R&D SME scheme? 

          There are a variety of different costs that qualify for R&D relief. These include:

          ·       Consumables
          ·       Salary
          ·       Externally provided workers (EPW)
          ·       Software licences
          ·       Sub-contractors

          From April 2023, it will also be possible to claim for pure mathematics, cloud computing, licence payments for datasets and data analytics. 
           
          Some costs can’t be claimed. These include:

          ·       Production and distribution costs
          ·       Capital expenditure on buildings and equipment
          ·       The cost of land
          ·       The creation of patents and trademarks.

          Why work with Leyton?

          • Leyton is the largest, independent R&D tax consultancy in Europe with the highest volume of R&D tax claims across the UK.
          • Leyton is a member of the HMRC consultative committee for R&D incentives. As a result we meet with the HMRC team overseeing R&D quarterly.
          • Our experienced technical consultants are educated to MSc/PhD level with 5+ years in industry, with field experience across a range of software, science and engineering industries.
          • We’ll work closely with your business to identify your eligible R&D expenditure while ensuring your claim is fully compliant with HMRC rules.

          Case Studies

          Hear from our clients about how working with Leyton has helped them receive important financial benefits from the R&D SME Scheme.

          Winch Design

          Winch Design is the UK’s leading super yacht and private jet architect. The process for Winch Design’s first claim involved in-depth interviews between Leyton and the company’s design team…
          Read more

          Alpha FX

          Alpha FX is a currency exchange specialist working internationally for businesses and institutions.Leyton identified over £300,000 of qualifying R&D expenditure in their business.
          Read more

          Astridge Dairy Farm

          Astridge are a dairy farm who experimented with different types of fertiliser and bespoke seed for their cattle which was specially made.
          Read more

          Case Studies

          Hear from our clients about how working with Leyton has helped them receive important financial benefits from the R&D SME Scheme.

          Winch Design

          Winch Design is the UK’s leading super yacht and private jet architect. The process for Winch Design’s first claim involved in-depth interviews between Leyton and the company’s design team…
          Read more

          Alpha FX

          Alpha FX is a currency exchange specialist working internationally for businesses and institutions.Leyton identified over £300,000 of qualifying R&D expenditure in their business.
          Read more

          Astridge Dairy Farm

          Astridge are a dairy farm who experimented with different types of fertiliser and bespoke seed for their cattle which was specially made.
          Read more

          Our process

            Introduction

            Consultancy team introduction and key claim stakeholder identification. Basic R&D eligibility assessment and delivery timeline agreed.

            Financial Discovery

            Introduction to expenditure categories, R&D project expenditure data provision, financial document provision.

            Technical Scoping

            Review and discussion of all eligible projects, selection of key project(s) for claim substantiation (case study).

            Financial Discovery

            Introduction to expenditure categories, R&D project expenditure data provision, financial document provision.

            Claim Package

            Compilation of technical and financial documentation, internal quality audit and resolution of queries.

            Submission

            Final documentation sign-off, tax benefit option agreement, detailed submission guidance and additional submission support.

          Talk to our R&D Tax specialists

          Contact the Team arrow_outward arrow_outward