How do you calculate a tax credit for my R&D claim?

If your business is loss making, you can choose to receive your R&D tax relief as a payable tax credit.

Let's take a simple case:

Total Allowable R&D costs	£ 80,000
Multiply by 130%	£ 104,000
R&D Tax Relief (enhanced expenditure)	£ 184,000
Payable Tax Credit (14.5%) of enhanced expenditure	£ 26,680

This results in a payable tax credit of £26,680. The R&D tax credit is not included as taxable income to the business.