The Research & Development Expenditure Credit (RDEC)
RDEC was introduced in 2013 to further encourage large companies to invest in R&D. RDEC has extended the reach of the Large Company scheme in that larger companies are able to submit a claim if they have made a qualifying loss.
The Credit under RDEC is accounted as income in a company’s profit and loss. The 11% rate (effective April 2015) therefore translates into a net relief of 8.8% after tax.
If you make a loss, RDEC allows you to claim the 8.8% as a cash sum, so long as you have no other outstanding taxes due to HMRC and you have paid PAYE and NI contributions for staff involved in R&D in excess of the amount of the repayment.
RDEC will replace the current Large Company Scheme in April 2016. Until that time, Large companies can chose to go either with the Large Company Scheme or use RDEC.