In this example, a loss-making company with a year end of 31 December, 2022 has a trade loss of £10,000 and qualifying R&D expenditure of £200,000, which when enhanced, gives total R&D costs of £260,000.
The amount available to surrender is £260,000 and the tax credit without the cap would be £39,150. The company has a PAYE and NIC liability of £3,000 for the period. The cap therefore reduces the tax credit that can be claimed to: £20,000 + (£3,000 PAYE liability x 300%) = £29,000.
To calculate the loss available to surrender for this amount, you can divide the result by 14.5%, which in this example is £200,000.