r&d relief

Companies which undertake Research & Development Expenditure are able to claim an enhanced tax deduction for certain expenditure. This amounts to 150% of the expenditure, e.g., if you spent £50,000, you would be able to claim tax relief on £75,000.

At the moment, your company will qualify for relief if it has less than 500 employees and it’s annual turnover is less than £35,000,000, however, you can only make a claim if you incur at least £10,000 in the accounting period, including the cost of staff involved in the research and development.

For the expenditure to be classed as R & D, it must be in a scientific or technical field and the aim must be to acquire new knowledge or to produce something new and improved. To see more information on the types of expenditure, see http://www.innovation.gov.uk

Any claim must be made within one year following the end of your accounting year, i.e. the same date as your accounts and Corporation Tax Return must be sent to Inland Revenue, therefore, any possibility of a claim should be brought to our attention when you submit your annual books and records.