Spin-Outs and Start-Ups: Common Pitfalls – Don’t Forget the Research & Development Tax Credit
28th August 2018

Research and Development tax credits are a valuable company tax relief that can reduce a company’s tax bill, or, for some, provide a cash repayment, of up to just over one-third of the company’s R&D spend.

A company must be carrying on a project seeking an advance in science or technology, through the resolution of uncertainty.  The allowable expenditure includes four main areas – staff costs, subcontractors, software and consumable items.

The company must qualify as an SME to obtain this very generous relief (headcount below 500 staff and at least one of; turnover below €100 million or gross assets less than €86 million).

There is less generous scheme, known as RDEC, available to companies which do not qualify as SMEs.  The RDEC is a taxable receipt, and is paid net of tax to companies with no corporation tax liability.  The rate was recently increased from 11% to 12%, effective from 1 January 2018.  The net cash benefit is 9.7%, (the 12% rate reduced by the corporation tax rate, currently 19%).

Where grants are received for an R&D project, there can be restrictions on what claims can be made under the SME scheme, depending on the type of grant.  If this is the case, you should still be able to claim via the RDEC scheme.  This is quite a complex area and it is best to get advice in advance.

Make sure you don’t miss out on these valuable reliefs.  Speak to us for specialist R&D advice.

Alison

About the author

Alison
Richardson
Richardsons
Alison has 20 years' experience supporting corporate clients with their accounting and tax requirements. Specialising in the technology sector, she helps companies with specifics such as R&D tax claims, SEIS, EIS, and grant audits.

Latest news

Venturefest Oxford 2020 – What’s next?

Venturefest Oxford 2020 – What’s next?

It’s with great regret that we have decided to cancel Venturefest Oxford 2020 due to COVID-19 concerns. READ MORE

Venturefest Oxford is still going strong after 21 years

Venturefest Oxford is still going strong after 21 years

Venturefest's main aim was to provide the space and opportunity for entrepreneurs and investors to network and collaborate. READ MORE

Taking our clients international by James Cowper Kreston

Taking our clients international by James Cowper Kreston

Whether you are exploring international markets for the first time, or have established operations, James Cowper Kreston can help guide you through the challenges and risks of trading internationally and maximise your opportunities. READ MORE

 

PARTNERS

Keep in touch

Sign up to the Venturefest Oxford newsletter to make sure you are the first to hear the latest news. The next #vfestox newsletter will be coming out soon! Make sure you're on the list!

 

 

 

 

 

Email Preferences