It’s a popular myth that you cannot claim UK Government’s Research & Development (R&D) tax credits if you have received grant funding. This is not strictly true, the grant funding will change how much you can claim under the R&D schemes, but the receipt of grant funding does not rule you out from claiming R&D tax relief or credits. Many innovative and pioneering companies, especially those that are under five years old, have to secure a mix of funding from different sources in order to survive and grow. Both grant funding and R&D tax relief or credits are important sources of funding, along with equity/share investment and loans, so it’s important to get the facts straight. The key points to keep in mind are listed below. There are two R&D tax relief/credit schemes: RDEC (Research and Development Expenditure Credit) which is for large companies – that is companies or groups of companies with over 500 employees in the … [Read more...]
Research and Development Tax UK Credits – Are You Claiming?
Research and Development Tax Credits in the UK has been uplifted each year for the past three years and are now at a record high level and are a great benefit to eligible Small and Medium Sized Enterprises (SME). The interesting fact is that many SMEs are not claiming when they could and should be. The R&D tax relief or credit is against corporation tax you have paid, or if you made a loss it is a cash credit at a reduced level. The current claim rate is at 125% of spend Currently the benefit is 125% of the value of your eligible spend on R&D. That means if you spend £100,000 on R&D in 2012 you can put an extra £125,000 against your corporation tax - saving you £25,000 in tax that you would otherwise have to spend! Usually the critical factor for a small business is understanding the scope of what can be claimed in terms of eligible projects and then writing a technical justification to support their claim for R&D Tax Credits. Misunderstandings... Some … [Read more...]
