R&D Tax Reliefs

R&D Tax Reliefs – made more attractive than ever. 

The budget announced a number of enhancements which will make the reliefs available for companies carrying out qualifying research and development even more attractive than ever, especially for Small and Medium sized enterprises (SMEs.)

From April 2011 the deduction available to SMEs will increase from 175% to 200%, so tax relief of £2,000 will be available for every £1,000 of qualifying spend.

From 2012 things get even better for SMEs with the rate increasing to 225%.

Where a company is profitable the enhanced expenditure reduces the corporation tax liability, by increasing the deduction available against its profits.   However, where a company is loss making, the loss may be surrendered in exchange for a direct cash payment from HMRC.  Historically this has been limiting to the PAYE and National Insurance contributions they have paid, but this restriction is to be removed, also with effect from 2012.

Timely and expert advice on taxation enables a business to plan ahead and minimise exposure to taxation. Call Owen Kyffin on 01295 270200 or email OwenK@whitleystimpson.co.uk.