Currently Research and Development costs can be claimed back at 200%. Here is a statement from HMRC’s website:
“From 1 April 2011, the tax relief on allowable R&D costs is 200 per cent – that is, for each £100 of qualifying costs, your company or organisation could have the income on which Corporation Tax is paid reduced by an additional £100 on top of the £100 spent. It also includes a payable credit in some circumstances.”
Last week the Draft Finance Bill spelt out plans by the government to increase R&D to 225%.
R&D is potentially available to any business carrying out technological advancements in products or processes. The increase by the government is planned from April 2012, along with some changes to scheme rules designed to increase competitiveness of the UK tax system. This follows an increase in April 2011 whereby for every £1 SMEs spend on research and development, they could claim back £2 in tax relief. Business Advice from Enable, helping you stay ahead.
If you are a Company spending Research and Development please get to know the facts it may save you you some money and reduce your tax liability.For more information speak with your accountant or take a look at HMRC’s R&D allowance guidelines .