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The RDEC scheme for R&D tax purposes

A company not treated as an SME for R & D tax relief will be treated under the research and development expenditure credit (RDEC) scheme.

The RDEC scheme rate of relief is less generous than the SME scheme, with the company saving 10.53% of R&D costs, compared to up to 33.35% under the SME scheme.

The qualifying R&D costs are different from the SME scheme.

The R&D costs eligible under the RDEC scheme include:

  • Staff
  • EPWs
  • Consumables
  • Software
  • volunteers for clinical trials.

  • Subcontractor costs limited to:

    • A qualifying body (university, research body or a charity)
    • Individuals
    • Partnership made up of individuals (excludes corporate members)

The method to calculate how to receive the R&D relief under RDEC is also different from the SME scheme.

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