Understanding UK Research and Development Tax Credit

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Understanding UK Research and Development Tax
Credit
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• What is HMRC RD Tax Credit?
• Companies investing in research and technology
  can claim relief from Corporation Tax and make a
  substantial saving.
• The Scheme was first launched in 2000
• Around 6 billion has been claimed by UK
  companies between 2000 and 2010.
• 24,000 companies have claimed this relief.
• There are two different schemes, viz.
• The Small or Medium-sized Enterprise Scheme
• The Large Company Scheme
• SMEs with less than 500 employees or with a
  turnover of 86 million can claim relief from
  Corporation Tax. Those with no tax bill can seek
  a cash payment.
• Large Companies Scheme is now replaced by the
  Above the Line credit scheme wherein a company
  with no tax bill can seek a cash replacement.

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• How Does the RD Tax Credit Work- Understanding
  the
• Nitty-gritties?
• The ATL (Above The Line) Scheme is not made
  compulsory until 2016. Currently the Large
  Company Scheme and the ATL run concurrently.
• ATL credit will be paid at headline rate of 10.
  This can offset the debit in a profit and loss
  account statement.
• For large company the RD expenditure is
  multiplied by 30 of the corporation tax of 24.
  This comes to 7.20 for every 100.
• For small company the RD expenditure is
  multiplied with 125 of small profits of 20.
  This saves 25 for every 100 spent.

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• What are the Preconditions to Claim Tax Credit
• To make a successful claim for RD Tax Credit,
• The company should pay Corporation Tax
• Credit cannot be claimed by a sole trader or a
  company that is in partnership.
• The companys current financial records must be
  up to date and should not cast a doubt about its
  ability to continue in business
• Claim can be made only for revenue expenditure
  such as premises cost and wages.
• Claim must be made within 2 years of the end of
  accounting year during which the expenditure was
  incurred.

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• How do we help?
• RandDtax offers to help accountancy firms to
  reduce problems related to RD Tax Credit claims
  and make a successful claim. Our service features
  include
• No win no fee
• Free initial assessment
• Helped clients gain in excess of 8 million
• Handled more than 500 claims for around 230
  companies
• Charge 40 lower than competitors

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• For more details, visit http//www.randdtax.co.uk