Research and development tax relief

News: May 2011

Research and development tax relief

If you undertake any research and development within your business, and operate as a limited company, you should look at the big improvements being introduced to this enhanced tax relief regime.

As from 1 April 2011, the relief is to be increased to 200% of the qualifying expenditure, up from 175%. Then from 1 April next year, and subject to EC State Aid approval, for every £1,000 you spend on R & D you will get tax relief on £2,250 = 225%. Well worth having!

There is currently a minimum expenditure level of £10,000 in a 12 month accounting period, but this to be removed from 1 April 2012. The definition of R & D is clearly vital to know. Basically it covers activities treated as such under generally accepted accounting practice. Under DTI guidelines it covers an activity which is seeking to achieve a significant advance in science or technology through the resolution of a scientific or technological uncertainty.

We will be looking to help you identify the scope for claiming this relief under the more relaxed regime, talking to HMRC specialist units where any doubts arise before submitting a claim on your behalf.

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