Commentary

D1.455 Small and medium-sized companies

Corporate tax
Corporate tax | Commentary

D1.455 Small and medium-sized companies

Corporate tax | Commentary

Vaccine research relief—the reliefs

D1.455 Small and medium-sized companies

Vaccine research relief for SMEs was abolished in relation to expenditure incurred on or after 1 April 2012. The provisions in this article therefore apply to SMEs where expenditure was incurred before 1 April 2012.

For expenditure incurred before 1 April 2012, VRR was given in addition to the existing R&D relief for SMEs1.

An SME could obtain relief by:

  1.  

    (a)     claiming an enhanced deduction in computing trade profits

  2.  

    (b)     surrendering the loss arising from the relief in return for the payment of a tax credit of 16% of the surrenderable loss (if loss-making); or

  3.  

    (c)     electing that certain pre-trading expenditure be treated as a deemed trading loss

Deduction in computing profits of trade

For expenditure incurred prior to 1 April 2012, where an SME is entitled to vaccine research relief for an accounting period for any qualifying expenditure, and is carrying on a trade in that period, it may claim a deduction of 120% (140% for expenditure incurred before 1 April 2011 and 150% for expenditure incurred before 1 August 2008) of the relevant qualifying expenditure in computing the profits for that period2.

Tax credit

A company may if loss-making, choose to surrender the loss arising from the relief in return for the payment of a tax credit of 16% of the

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