R&D Tax Credits

Importance of Claiming R&D Tax Credit Relief – What Are R&D Tax Credits?

Some of the main points explaining R&D tax credits:

  • R&D Tax Credits were introduced for SMEs in April 2000 and for large companies one year later.
  • They apply to limited companies and credits can be offset against Corporation Tax or, where there are no profits, a cash credit is available – all subject to qualifying conditions being met.
  • Since April 2015, qualifying expenditure can be treated at 230% of value for Corporation Tax computations.  Full details of rate changes can be found here Rates.pdf and illustrate continued government support for the scheme.
  • Prior to 9th December 2009 an SME had to own the resulting intellectual property of R&D in order to qualify.  From that date this condition no longer applies.
  • Qualifying costs can be internal labour costs, a proportion of sub contracted R&D work and qualifying direct consumable costs.
  • Claims must be made within two years of the financial year end in which they were incurred – unless R&D costs have been capitalised then written-off later.  In that case, the claim must be within two years of the year end when the costs were written-off.

Contact our skilled and experienced R&D tax credit consultants for all your R&D tax claim needs.   Please call 01483 808301.

Click here for enhancement and tax credit Rates.pdf