Research and Development tax reliefs

Research and Development tax reliefs | Accountants in Pipers Pool | Accountants in Pool

Research and Development tax reliefs

Topic: Research and Development tax reliefs

There are two schemes for claiming relief for R&D expenditure. The schemes are known as the Small or Medium-sized Enterprise (SME) Scheme for smaller companies, and the Research and Development Expenditure Credit (RDEC) scheme for large companies.

Large companies can currently claim a 12% RDEC also known as an ‘above the line tax credit’ for qualifying expenditure. The 12% rate applies to expenditure incurred on or after 1 January 2018. The RDEC allows companies to claim an enhanced Corporation Tax deduction or payable credit on qualifying R&D costs. The RDEC replaced the large company scheme that was withdrawn in April 2016.

The SME scheme offers more generous reliefs. SMEs can currently claim R&D tax credits of 230% for expenditure. However, SMEs can elect to claim relief under the RDEC scheme if they are unable to claim relief under the SME scheme because of a grant or subsidy, or because they are carrying out subcontracted R&D work. A company is usually defined as an SME if staff headcount is less than 500 and either turnover is less than €100m, or balance sheet total is less than €86m.

If a company is seeking to develop or solve scientific or technological uncertainty for the benefit of their ‘sector’, then you may qualify for R&D tax reliefs. It should be noted that only certain costs are available for relief.

For more information on Research and Development tax reliefs, Book a Free Consultation

Need Accountancy Support?

For information on bespoke training, or if you have any other questions for Makesworth Accountant, please fill in your details below



    By submitting the form, you agree with the storage and handling of your data to contact you to arrange a free consultation with us and to receive latest updates by Makesworth Accountants in accordance with our Privacy Policy

    Proud to be featured in

    Happy with our services? Please leave us a Google Review. Click here