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- To make a claim for research and development tax relief, your business needs to qualify under one of two R&D schemes.
- The first provides research and development tax relief for small and medium-sized enterprises.
- The second, the Research & Development Expenditure Credit (RDEC), is aimed, generally speaking, at larger businesses.
- The rate of relief available under the SME scheme is significantly higher than under the RDEC scheme.
- The SME scheme allows a generous 230% of qualifying R&D related expenditure to be deducted from the company’s taxable profits for the relevant accounting period.
- Whereas under RDEC, 11% can be claimed for qualifying spend made after April 2016, or 12% for spend after 1 January 2018.
- To qualify for the SME scheme, your company must satisfy the following criteria:
- Fewer than 500 employees
- Turnover less than €100 million per annum
- Be a going concern ie not be in administration
- Have traded for more than a year
- Be a limited UK company subject to corporation tax
- Where the SME criteria are not met, the business may still be eligible for relief under RDEC.
At ETC Tax we are experienced in handling client’s claims from start to finish. Get in touch if you have any queries