Companies which invent new production methods or products can claim enhanced tax relief for the Research and Development (R&D) costs. Small and medium sized companies can claim 230% of qualifying R&D costs, and a 14.5% payable tax credit if this extra deduction results in a loss!
This is a very attractive relief and it’s really quite easy to claim. You can ask HMRC for an advance assurance that your company, and its R&D projects, will meet the requirements for R&D tax relief. We can help you do this.
The main benefit of advance assurance is that HMRC won’t raise further questions about your initial R&D claim, and for R&D claims submitted for the next two accounting periods.
A company can apply for Advance Assurance if it:
• hasn’t claimed R&D tax relief before
• has an annual turnover of £2 million or less
• has fewer than 50 employees
You need to apply for R&D tax relief within two years from the end of the accounting period in which the R&D costs were incurred. So, if your company has been innovative in the recent past, don’t delay your application for R&D tax relief!
Action Point!
Check the R&D expenses for which your company can claim an enhanced deduction.
