How R & D tax relief specialists can help you
Innovation plays a crucial role in the future success of the UK economy. However, some businesses struggle in constantly investing in Research & Development (R&D) which limits their growth and business expansion. That’s why Haines Watts R & D tax relief specialists have helped SMEs claim thousands of pounds in R&D tax claims.
The Government recognises the issue, and has put in place tax relief for companies which incur qualifying expenditure on R&D, with two different approaches for SMEs and larger companies.
If you look at the definition of R&D it is broader than you might think. Any company developing new or improved products, processes or systems might be able to qualify for a R&D tax relief.
R&D tax relief provides an enhanced deduction for qualifying costs that can be set against profits. The enhanced deduction for SMEs is 225% of qualifying expenditure and those companies can claim a payable R&D tax credit where the enhanced deduction results in a loss. This isn’t an option for large companies, where the tax relief is instead a deduction of 130% of qualifying expenditure, reducing taxable profits.
Although the R&D tax relief has been in place for some time, not all eligible companies have taken advantage of it. Haines Watts can provide guidance on the scheme to companies which might not be sure if their R&D activity qualifies. Sometimes it may help if we can speak to the Revenue in advance of the claim going in, to agree a methodology. Our R&D tax relief specialists can also help with developing systems to report the information needed for such a claim.
R&D Tax relief rates
From April 2013, a 10% “Above the Line” tax credit was introduced for R&D expenditure for large companies. This treatment will initially be optional, but will become compulsory from 1st April 2016. The Above the Line credit (ATL credit) will be calculated directly as a percentage of the company’s R&D spend.
Haines Watts the R&D tax relief specialists
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