Adviser - Spring 2016

Adviser/ tax

Tax relief for companies investing in research and development

I s your company missing out on research and development tax credits? If your company is developing a new product or service, or improving an existing process or item, then you may be able to claim valuable tax relief from HMRC. Who qualifies? Awide variety of companies can claim research and development (R&D) tax relief. If your company is involved in a project uncertainty then you should be eligible to make a claim. In some cases it will be clear that a claim can be made such as developing new scientific, medical or technological products. However, in some cases it is not so obvious. If your business is incurring costs to create something new, or changing the way something is done then you may also be able to make a claim! What’s changed? From last year, small and medium sized companies with a turnover under £2 million and fewer than 50 employees have been able to seek advance assurance from HMRC, giving them greater certainty over their claim to aid cash flow and improve financial planning. How does it work? The R&D tax relief scheme helps you reduce the amount of corporation tax you pay by giving an enhanced deduction for costs that relate to the R&D project. These enhanced costs can then be offset against the profits of the business. If you are a small or medium sized company which qualifies, you can claim tax relief on 230% of your qualifying R&D expenditure. Even if your company is loss making you can still benefit by claiming a cash tax credit at 14.5% of the qualifying enhanced expenditure. Alternatively, the loss can be carried forward to set against profits made in future years. Large companies can also qualify for the relief with an enhanced deduction of 130%. seeking a scientific or technological advance, and there is an element of

Scrutton Bland can work with you to identify items of expenditure which will qualify for R&D tax relief, and to make the claim to HMRC on your behalf. Our team of tax advisers have substantial expertise in maximising the saving for businesses:

Jason Fayers 01473 267000 i Gavin Birchall 01206 838400 Sarah Gamblin 01473 267000


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