RESEARCH AND DEVELOPMENT EXPENDITURE CREDIT – RDEC
WHAT YOU NEED TO KNOW with RDEC
- An RDEC tax credit is worth 13% of your qualifying R&D expenditure.
- It is taxable at the normal Corporation Tax rate of 19%
- The benefit can be shown ATL (above the line), which means it is visible as an income in your accounts
- It is offset against your tax liability or, sometimes, can be payable in cash.
RESEARCH AND DEVELOPMENT EXPENDITURE CREDIT
The official RDEC rate is currently 13%. Because it’s paid net of Corporation Tax, the effective RDEC rate you’ll receive is 11p for £1 spent. This rate was increased in 2020 from 12% to 13%, which is the third time it increased since the scheme introduction. Certainly great news for organisations using the incentive.
CapEx’ tax specialists can help you calculate the potential value of an RDEC claim for your business. Alternatively, find out more about R&D tax credit claims.