The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
Enhanced R&D deduction for SME’s
CTA 2009, s 1044(8)
The deduction is given by allowing a further 130% of the qualifying R&D expenditure, in addition to the usual 100% deduction for such qualifying expenditure, in arriving at the adjusted profits for tax purposes.
HMRC has produced a guide to R&D tax relief for small companies which can be found at Making R&D easier for small companies .
The definition of an SME is detailed in Meaning of SME and large companies for R&D and qualifying expenditure is set out in the Qualifying expenditure for R&D tax relief guidance note.
Note that where the company also qualifies to claim one of the creative sector reliefs (such as television tax relief and video games relief) it must choose between SME R&D relief and the creative sector reliefs, it cannot claim both in respect of the same project because they are both State Aid. An SME can claim large company R&D expenditure credit (RDEC) on the same project for which a creative sector relief claim has been made but the expenditure on that project can either be relieved under the creative sector relief or RDEC it cannot be relieved under both schemes, see below for more details of R&D claims where State Aid has been received.
Also see the Television tax reliefs ― key provisions and Video games tax relief ― key provisions and subsequent guidance notes for more on these other reliefs.
Cap on R&D aid
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login