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What are the differences in claiming as an SME or under RDEC as a large company?

There are differences in the rate. From the changes in April 2023, the RDEC rate increased from 13% to 20%, the SME additional deduction rate reduced from 130% to 86%, and the SME payable credit rate decreased from 14.5% to 10%. Therefore your benefit will differ depending on which scheme you’re eligible for. 

The main difference between claiming as an SME versus under RDEC is in the accountancy treatment. For SMEs, the tax credits are non-taxable and will only affect your tax liability. They are a below-the-line benefit but under RDEC, it’s an above-the-line benefit. Under RDEC, the R&D credits that companies receive under RDEC will be classed as credits when calculating the pre-tax profit.

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