What R&D tax relief is available?
Research and development tax relief is available to small, medium and large companies in any industry and is available on capital and revenue expenditure.
The SME scheme enables small and medium enterprises to claim an enhanced corporation tax deduction of 175% (150% prior to 1 August 2008) of the qualifying expenditure on a research and development project during the accounting period.
SMEs that are loss-making may surrender the enhanced deduction to HM Revenue and Customs for a cash tax credit equal to 24.5% (24% prior to 1 August 2008) of the uplifted amount (restricted to PAYE and NIC contributions).
Companies operating within the large company scheme may claim an enhanced corporation tax deduction of 130% (125% prior to 1 April 2008) of the qualifying expenditure on a research and development project during the accounting period.
Qualifying revenue expenditure includes employee costs, consumable materials and a proportion of utilities used during the process.
Companies of all sizes may claim research and development allowances of 100% on qualifying capital expenditure incurred on a project.
