BEHIND THE NUMBERS
How this calculation works
Worked example
£100,000 × 20% = £20,000 gross RDEC. With no CT to discharge, 19% notional tax restricts £3,800. The £80,000 PAYE cap does not bind, so cash payable is £16,200.
Example result: £16,200.00
Gross credit is not the cash repayment
A merged-scheme credit first settles liabilities. The notional-tax restriction and PAYE cap can also defer parts of the value. The seven-step breakdown identifies cash payable separately from tax settled and credit carried forward.
Why a 25% notional rate can apply below a 25% effective rate
A company within marginal relief still has profits chargeable at the main rate for this payment restriction. Do not replace the statutory notional rate with an average effective tax rate from the accounts.
ERIS consumes a loss
The payable ERIS credit is exchanged for surrendering a qualifying loss. A PAYE cap can reduce the credit and the amount surrendered. The remaining loss output helps prevent treating both the credit and the same loss as available relief.
Assumptions and rounding
- Qualifying expenditure and the correct scheme have been established separately.
- Current-period CT is supplied after the taxable RDEC is included; marginal relief and associated-company effects belong in that figure.
- The ERIS loss is available before the additional deduction and this surrender.
Questions about this calculator
Can the same expenditure claim merged RDEC and ERIS?
No. An eligible intensive SME can compare the schemes but cannot claim both for the same expenditure.
What belongs in current Corporation Tax?
The liability after accounting for the taxable new RDEC and other tax adjustments, but before these credit offsets. This calculator does not prepare that Corporation Tax computation.
Does the £20,000 cap addition apply to a six-month period?
It is proportionately reduced. Six months uses £10,000 plus three times the relevant PAYE/NIC liabilities.