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Research and Development (R&D) tax relief for small and medium-sized enterprises.
How to claim Corporation Tax relief for costs on R&D if you’re a small and medium-sized enterprise (SME).
What is Research and Development (R&D) tax relief?
R&D tax relief supports companies that work on innovative projects in science and technology.
You cannot claim if the advance is in:
- The arts
- Humanities
- Social sciences, including economics
SME R&D tax relief allows companies to:
- Deduct an extra 86% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total of 186% deduction
- Claim a payable tax credit if the company has claimed relief and made a loss, the payable credit is worth up to 10% of the surrender-able loss
To claim the relief, you need to be a SME and show how your project meets the standard definition of R&D.
To claim the relief, you need to be a SME and show how
your project meets the standard definition of R&D.
If you’re making your first claim for tax relief as a SME, you may be able to apply for advance assurance.
Companies that can claim R&D tax relief
You can claim tax relief if you’re a SME with:
- less than 500 staff
- a turnover of under 100 million euros or
- a balance sheet total under 86 million euros
If your company has external investors, this can affect your SME status. You will need to include the figures of linked and partner enterprises when you work out if you’re a SME. The staff, turnover and balance sheets of any linked or partner enterprises should be included in your total.
Which costs qualify for R&D tax relief
You can claim the tax relief on some of the costs you incur from the start to the end of the project.
R&D starts when work begins to resolve the scientific or technological uncertainty and ends when that uncertainty is resolved, or the work to resolve it stops. The information in the link below will tell you which costs you can and cannot claim for.
Detailed information about R&D tax relief can be found here »
Credit: gov.uk
How to claim Corporation Tax relief for costs on R&D if you’re a small and medium-sized enterprise (SME).
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