Research & Development
Tax Relief
Latest Developments
As of 31st March 2008, the time companies have to claim tax relief on research and development (R&D) is being cut from 6 years to 2 years. Companies involved in research and development need to urgently review their tax claims over the last few years to maximise the benefits of R&D tax credits.
The government is also increasing the level of tax relief for small medium enterprises (SMEs) and large businesses. Large business R&D tax relief is being increased from 7.5 pence in the pound to 8.4 pence, and SME tax relief will be increased from 15 pence in the pound to 21 pence. This will no doubt boost investment in research and development, a critical factor to future UK competitiveness in the global economy.
Background to R&D Tax Credits
The government introduced research and development tax credits to drive innovation in the economy. The implementation of R&D tax credits requires sound strategy as it can increase the competitiveness of your business; allowing you to fund critical research through reductions in tax.
For a project to be designated as R&D for tax purposes, it should seek to achieve an "advance in overall knowledge or capability in a field of science or technology" (HM Revenue & Customs). Speak to our specialists who can help you develop the financial strategies to develop innovation in your company, and reduce your company's tax bill.
Further Reading:
Supporting growth in innovation: enhancing the R&D tax credit