R&D Tax Incentives to be Aware of

HMRC are offering some great tax incentives/breaks which many companies may not be aware of or indeed believe they can benefit from.

In the last 12 months a number of our clients have collectively benefitted from corporation tax savings in excess of £1.5million from the following areas, hopefully you can join them. Contact our team to discuss how we can help you benefit.

R&D

HMRC are keen to reward innovation in many industry sectors, you don’t need to be a new Mark Zuckerberg or have invented a cure for the common cold to make a claim.   Here is a great article from Management Today highlighting some other things you might not know about tax credits.

From 1st April 2015 the rate of R&D enhancement became 130% so in effect, if you’ve spent £100,000 on qualifying R&D revenue costs and these are included in the company accounts you will get an extra deduction of £130,000 against your company’s profits/losses in your tax computation when the company tax position is calculated.

There are 3 options for a company once an R&D report and calculations have been prepared:

  1. The R&D enhancement reduces the company’s tax adjusted profit and subsequently, also their corporation tax liability.
  1. The R&D enhancement increases a company’s tax adjusted loss, and a certain level of loss can be surrendered to HMRC for a repayable R&D tax credit.
  1. The R&D enhancement turns an accounting profit into a tax adjusted loss, and as above, a certain level of loss can be surrendered to HMRC for a repayable R&D tax credit

The R&D tax credit payable by HMRC is currently 14.5% of the amount of loss being surrendered.

Capital Allowances

If you have recently acquired, are considering acquiring, or are about to sell a commercial property on which no capital allowances have previously been claimed – there could well be scope to make a sizeable claim on qualifying items.

Or have you recently undertaken/or are about to undertake a sizeable refurbishment of your offices/premises and are unsure what tax breaks you may be entitled to?

Working closely with a highly reputable firm of Chartered Surveyors, we can evaluate the items on which a claim can be made and produce a report summarising the savings available.

One of our most recent undertakings saw a client save in excess of £120,000 corporation tax on the basis of a capital allowance claim.

Film Tax Credits

With a number of clients in the film industry, we have worked alongside them during all aspects of a claim. From the all-important ‘cultural test’ application, to ensure they get their BFI certification – a must if a claim is to be viable – to calculation of the tax savings and submission of the necessary information to HMRC. Read more on accessing film tax relief  in an article from BFI.

In a similar vein to R&D relief, a rate of enhancement of up to 100% is available on certain qualifying costs with a payable tax credit from HMRC of up to 25%.

For further details on any of the above, please contact our team on 01202 717867.

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