Research and Development (R&D) reliefs support companies that work on innovative projects in science and technology. It can be claimed by a range of companies that seek to research or develop an advance in their field. It can even be claimed on unsuccessful projects. There is often a lot of misconception surrounding what qualifies for this incentive, which is why Walmer exists.
SME part of the Incentive allows a company to claim approximately between 25-33% of qualifying expenditure for up to 2 Accounting Periods retrospectively. Post 1st April 2023, the rate will have decreased to between 16-27% being able to be claimed back.
SME’s can claim for both internal & external R&D expenditure. The benefit can be seen as a cash injection, tax offset, or a hybrid of the two.
The RDEC (Large Company) Incentive is primarily aimed at large companies employing over 500 employees, however, in certain circumstances where an SME is being subcontracted by a large entity or have received state-aid (e.g, Grants) such SMEs must claim through RDEC.
Only internal R&D expenditure can be claimed upon, whereas subcontractors are restricted to entities not subject to Corporation Tax, such as individuals, charities and educational institutions.
This is an above-the-line credit, meaning it is added to the company profits and therefore taxable. The rate of relief pre-April 2023 was approximately 10% net (13% gross), with this figure increasing to approximately 18% net (20% gross).
SMEs - Small/Medium Enterprises
RDEC - Research and Development Expenditure Credit
London
184 Shepherds Bush Road, Hammersmith, London, W6 7NL
Email:
info@walmergroup.com
Call Us:
020 8004 4257
London
184 Shepherds Bush Road, Hammersmith, London, W6 7NL
Email:
info@walmergroup.com
Call Us:
020 8004 4257