Research & Development (R&D)
R&D is a wide ranging and generous tax relief. In our experience many businesses are not claiming the relief to which they are entitled because they do not recognise that they are actually undertaking any qualifying research and development activities, e.g. product development, improvement, etc. The DBERR (formerly DTI) website http://www.berr.gov.uk/files/file36112.pdf gives examples of businesses that have qualified – the range of qualifying trades is amazing.
R&D tax relief has recently become much more accessible to businesses; the set up of the new specialist units with Inspectors who state their brief is to give money away makes claiming relief simpler. However, to complicate matters the Revenue have introduced a restriction on claims: from 31 March 2008 claims may only be made for the last two years rather than the potential six as is currently the case.
R&D is a valuable relief:
- 100% capital allowances
- 125% on qualifying costs for large companies and sub-contractor costs
- 150% for direct costs of SMEs.
The rates on the latter two should increase to 150% and 175% from April this year, subject to EU State Aid approval.
Time is running out – if you think you may have a claim we need to act quickly.
Date: 8th February, 2008
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