Making the Most of your Research and Development - Don't Forget the Tax Relief!

If your company undertakes qualifying research and development (R&D) work, then you may qualify for valuable (but often forgotten) R&D tax relief. These can also results in tax repayments from HM Revenue and Customs (HMRC) in certain circumstances.

The rates have increased significantly in recent years, depending upon the size of company involved, with additional tax relief of up to a maximum of 100% available from 1 April 2011, and a proposed increase in the relief to a maximum of 125% from 1 April 2012. For example, if a small company incurs qualifying costs of £100,000 after 1 April 2012, it is entitled to an additional deduction from its taxable profits of £125,000 for this expenditure. Definitely worth considering! There are various rules and restrictions which apply, particularly where the company also receives grant funding, but we can check these out for you.

Further enhancements to the relief will apply from 1 April 2012, including removal of a minimum expenditure limit and a restriction based on the company tax and national insurance payments. Companies who previously did not qualify may therefore find out that their circumstances have changed. These enhancements, together with the increased rates, emphasise the importance of reviewing your circumstances on a regular basis. 

We at French Duncan have significant experience in the preparation of such claims for our clients, and would be delighted to review the eligibility of your research and development projects. if you think that your company may qualify, then please do not hesitate to get in touch.

Margaret Sinclair

Tax Partner 

Email: m.sinclair@frenchduncan.co.uk

Tel: 0131 225 6336