R&D tax relief: A hot topic!

In the recent Autumn statement, there was the mention of a further focus on the matter of Research & Development (R&D), whereby this is something that is certainly wanted by the government given its benefits in moving the economy forward in a positive manner.

However, R&D can and does provide businesses with a very attractive tax relief, however this is only relevant to Limited Companies.

To claim the tax relief, the requirements associated with such are complex, although we do have many clients benefiting from our expertise in this area.

Currently for our SME clients every £100 of expenditure which qualifies for the relief you will receive an additional £130 of tax relief, and of course will allow companies to reduce their corporation tax liability. In some cases, a taxable loss can arise, and it is possible to surrender this loss for a tax repayment, which is currently at a rate of 14.5% of the loss that has been surrendered.

The proposal is for the relief to remain, albeit at a reduced level, with instead of an additional £130 there will be a reduction to £86, and instead of a rate of 14.5% this will be reduced to 10%.

In addition to the above, there will also be a greater focus on the “abuse arising in the system” and the compliance surrounding such.

As mentioned, we do assist many of our clients with the complex tax relief, and I would suggest that you should talk to your normal contact if you have any further questions on the matter.

Disclaimer - All information in this post was correct at time of writing.