Does making an R&D tax credit claim always have a positive impact on cash flow?

For profitable companies, R&D tax credits will always have a positive impact on cash flow, since the first step offsets against corporate tax.

However this may not always be the case for participants under the SME scheme that are operating at a loss, as R&D tax credits will partially or completely offset the pre-existing loss. 

Therefore, it’s important to take into account that the R&D scheme may not be financially beneficial for your situation. Sometimes preserving or increasing loss can be just as valuable as obtaining cash, especially if these losses can be used for tax relief. 

The RDEC scheme however, involves caps and offsets that allow the claim to be carried forward for future use, although converting this into cash will depend on future calculations in subsequent years.