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Quick answer
An above-the-line R&D credit for qualifying UK R&D activity, now part of the merged R&D scheme. Above-the-line R&D tax credit historically used by larger companies and now part of the merged R&D scheme. Check current guidance for applicable accounting periods. It is aimed at UK companies carrying out qualifying R&D — typically larger companies or those not eligible for SME relief. Eligibility typically requires UK companies carrying out qualifying R&D; rules vary by accounting period.
Funding amount
Varies
Region
United Kingdom
Stage
Any stage
Provider
HMRC
Frequently asked questions
- What is RDEC?
- RDEC (R&D Expenditure Credit) is the UK's above-the-line R&D credit. It is used by large companies and certain subsidised SME R&D, calculated as a percentage of qualifying R&D expenditure.
- Who claims under RDEC rather than the SME regime?
- Large companies, certain subsidised SME R&D, and SME R&D performed under contract for a larger customer typically fall under RDEC rules.
- Is RDEC taxable?
- Yes. RDEC is treated as taxable income above-the-line — model the gross-to-net economics when assessing the benefit.
- What costs qualify?
- Qualifying staff, externally-provided workers, subcontractors, consumables, software and the other categories defined by HMRC under the RDEC rules.
- What is the advance-and-uncertainty test?
- Same in principle as the SME regime — the project must seek a scientific or technological advance and overcome technological uncertainty that a competent professional in the field cannot trivially resolve.
- Why do RDEC claims fail?
- Typically because the project does not meet the advance test, costs are outside qualifying categories, subsidy rules are misapplied, or documentation is insufficient under enquiry.
- How do we file an RDEC claim?
- Included in the corporation-tax return (CT600) with an RDEC schedule and reflected above-the-line in the financial statements.
- Can we combine RDEC with other reliefs?
- RDEC sits within the wider R&D and Patent Box landscape. Interactions between schemes are technical — take specialist advice.
- How has the regime changed?
- Rules have been amended materially in recent fiscal events. Always confirm the current regime, rates and rules with a specialist before claiming.
- Where can I read official guidance?
- The official guidance is on gov.uk under the RDEC pages. This is not tax advice.
Who it's for
UK companies carrying out qualifying R&D — typically larger companies or those not eligible for SME relief.
Usually too early when
Advisor signal
Apply before you can clearly articulate the project scope, evidence of fit with HMRC's priorities, and a credible delivery plan. Although open to most stages, assessors expect a coherent track record on which to score the application.
Eligibility
UK companies carrying out qualifying R&D; rules vary by accounting period.
Evidence you'll need
Technical narrative, qualifying cost breakdown, additional information form.
Application timeline
Claimed via the Company Tax Return.
Common reasons applications fail
Misclassifying routine work as R&D, weak cost evidence.
What improves your odds
Strong alignment with HMRC's published priorities. A specific, measurable project with named deliverables and timelines. Evidence the team can deliver — relevant prior projects, named technical leads, and secured (not hoped-for) match funding where required. Clear quantified impact: jobs, productivity, exports, emissions reduction or commercial outcomes appropriate to the scheme.
Typical successful applicant
A UK-based organisation that already meets the eligibility criteria for R&D Expenditure Credit (RDEC) on paper, has prior delivery experience relevant to HMRC, and can evidence the stated impact within the funding window.
Common misconceptions
That R&D Expenditure Credit (RDEC) is a quick or guaranteed source of capital. It is not — assessment is competitive and most applicants are unsuccessful. That a strong application can be drafted in days; in practice, competitive submissions take weeks of preparation, evidence gathering, and internal sign-off.
What happens next
Credit is offset against corporation tax or, subject to rules, paid in cash.
What comes next
On a successful award: deliver against the agreed milestones, build the evidence base for follow-on funding (commercial pilots, larger grants, debt or equity), and document outcomes that strengthen the next application. On rejection: request feedback, address the specific weaknesses, and consider an adjacent scheme on the R&D Tax & Reliefs Pathway before re-applying.
Funding context
R&D Expenditure Credit (RDEC) sits within HMRC's wider funding remit. Treat it as one option on the R&D Tax & Reliefs Pathway; the right route depends on stage, project type and what comes next commercially. Use it alongside, not instead of, complementary support.
Related routes
- RDEC vs ERIS (R&D Intensive SME)
- Patent Box vs RDEC
- R&D Tax Relief vs Innovate UK Smart Grants
- Innovation Loans vs R&D Tax Relief
- Do I qualify for RDEC under the new regime?
- Patent Box or R&D Tax Relief?
- Should I claim R&D Tax Relief or apply for a grant?
- Which R&D funding route is best?
- R&D Tax & Reliefs Pathway
- Innovation Funding Pathway
- R&D Tax Relief for SMEs
- Patent Box
- Innovate UK Smart Grants
Objectives
Regions