Research and development tax incentives. Guidance for your business

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Rosemary Barrett
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1 Research and development tax incentives Guidance for your business

2 Research and development tax incentives Research and development (R&D) tax incentives are one of a number of measures introduced by the government to make the UK a more competitive place to do business. The R&D tax incentives are available to most companies actively involved in R&D and are too generous to ignore. By making a relatively straightforward R&D claim, a company can either reduce its corporation tax bill or, in certain circumstances, make a claim to receive cash from HMRC. Over the last year we have identified over 26 million of qualifying R&D expenditure for our clients resulting in a tax saving in excess of 5 million.

3 SME schemes SMEs can currently claim 130% additional tax relief over and above the tax relief available for R&D costs. In certain circumstances, if the SME makes a trading loss, it can surrender the amount of the loss that relates to the R&D relief for a cash payment. The cash payment is currently 14.5% of the losses foregone. This is equivalent to for every 100 R&D expenditure. Large company schemes Large companies can claim 30% additional tax relief over and above the tax relief available for R&D costs. Alternatively, they can claim under the Above The Line (ATL) tax credit scheme. Under ATL, the tax credit can be offset against the company s corporation tax liability and for loss making companies can be repayable, in the right circumstances. The ATL rate is currently 11%. This is equivalent to an effective tax reduction of 8.8% of the R&D expenditure. Capital expenditure Tax relief for capital expenditure is available under the capital allowance regime. R&D expenditure on capital items qualifies for an immediate 100% tax deduction, rather than at 18% on a reducing balance basis. This enables companies to significantly accelerate tax relief for capital expenditure.

4 We pride ourselves on giving you that personal touch. Who can claim R&D tax incentives? R&D tax incentives are not just available to technology companies and companies carrying out scientific research. They can apply to a surprisingly wide range of industries including: manufacturing and engineering, food and beverage, and biotechnological and pharmaceutical. They can also apply to companies developing IT and software, whether this is for sale or for use within the business data management and stock control systems to enhance the business performance. This list is by no means exhaustive. Why Crowe Clark Whitehill? Our specialist team have dealt with R&D claims for many years in a wide range of business sectors. Our advice is tailored, pragmatic and focused to your needs. Services we can provide We can work with you in any of the following ways to help you maximise the available benefits: ffa no obligation consultation. ffpreparation of the claim. ffa review and submission of replacement claims if previous claims are understated. ffhelp to identify qualifying projects. ffadvice on setting up internal procedures to capture R&D data. ffdealing with HMRC queries. ffadvice on technical or practical issues. f fadvice on making the most of R&D tax losses. Crowe Clark Whitehill LLP

Can my company claim R&D incentives? As a rough guide, if a company can answer yes to both of the following two questions, it is likely that an R&D claim can be made: 1.

5 Can my company claim R&D incentives? As a rough guide, if a company can answer yes to both of the following two questions, it is likely that an R&D claim can be made: 1. Has the company sought to improve its products or processes? 2. Did the company require scientific or technological uncertainties to be overcome to achieve the improvement?

6 Start the conversation Cheltenham Richard Austin +44 (0) Kent Simon Warne +44 (0) London Laurence Field +44 (0) Manchester Rebecca Durrant +44(0) Midlands Rob Gunn +44 (0) Thames Valley Stuart Weekes +44 (0) Follow us Find out more about us at Crowe Clark Whitehill LLP is a member of Crowe Horwath International, a Swiss verein (Crowe Horwath). Each member firm of Crowe Horwath is a separate and independent legal entity. Crowe Clark Whitehill LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath or any other member of Crowe Horwath and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath or any other Crowe Horwath member Crowe Clark Whitehill LLP 0269 Crowe Clark Whitehill LLP is registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales and is authorised and regulated by the Financial Conduct Authority.

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