The R&D (Research…) Program in the UK is to encourage research and development in the UK that will lead to new or improved technologically advanced products or processes.
What is the R&D Program within the United Kingdom?
Purpose – to encourage research and development in the UK that will lead to new or improved technologically advanced products or processes.
How – by providing Corporation Tax relief that will reduce your company tax bill. In some cases, a company may receive a cash refund.
Companies must be liable for Corporations Tax.
R&D Relief Schemes
Relief is given as a taxable credit on the amount of qualifying R&D expenditures.
There are two schemes, depending on the size:
Small or Medium-sized Enterprise – SME scheme
Fewer than 500 employees.
Annual turnover not exceeding € 100 million.
A balance sheet not exceeding € 86 million.
In determining the above criteria, Association rules apply to companies that you own 25% or more, or that own 25% or more of your company.
Company must be a going concern at all times.
Large Company Scheme
Applies if your company does NOT meet the definition of a SME.
Relief on allowable SR&ED costs is 130%. That is, for each £100 of qualifying costs, your company’s income on which Corporation Tax is paid, is reduced by an additional £30 on top of the £100 spent.
Relief is NOT refundable.
R&D Projects – Defined
“Project seeks to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty.”
Project must be related to your company or organization’s trade – either existing or intended start up.
Must answer the following four questions:
What were the scientific or technological uncertainties?
How and when were the uncertainties actually overcome?
Why was the knowledge being sought not readily deductible by a competent professional?
What was the scientific or technological advance?
ResDev prepares SR&ED submissions on behalf of their clients. Since this our main focus, we are able to focus 100% of our energy on preparing the claims and staying current on SR&ED program developments.