Blogs
Commencement of the new SME rate and SME definition
EU approval for the change to the SME R&D tax relief rate and to the definition of a SME is in place from 1 August 2008. The relief rate available for qualifying SMEs increases from 150% to 175% of their investment and the size of a company that can qualify as a SME has increased to 500 staff and either turnover not exceeding EUR 100 million or a balance sheet total not exceeding EUR 86 million.
The increase to the relief rate from 125% to 130% for large companies took effect from 1 April 2008.
How to claim research and development
Companies of all industries should take steps to understand if and how the research and development (R&D) tax relief programme relates to their business.
Research & development Tax relief for SMEs
Working with the PPMA as a strategic alliance partner, Braithwaite Tax Recovery Consultants can help eligible members claim tax relief on research & development (R&D) expenditure, which for SMEs has been available since 1 April 2000, and from 1 April ‘02 for large companies.Research & development Tax relief for SMEs
Time to claim R&D tax relief and credits
The government is planning to deliver a 75 per cent increase in research and development as a percentage of GDP by 2014, to remain competitive in the global market.
One method of doing this is through research and development (R&D) tax relief and credits in the corporate tax system. R&D tax relief is available for SMEs from 1 April 2000 and for large companies from 1 April 2002.
Budget 2007 - R&D Tax Credit Changes
From April 2008 the value of R&D tax relief for SMEs will increase from 150% to 175% and the value of R&D tax relief for large companies will increase from 125% to 130%. As a result SMEs will see an after tax benefit of between 15% and 24% of R&D spend and large companies will see an after tax benefit of around 8.4% of R&D spend.
Budget 2006 - R&D Tax Credit Changes
The Chancellor has increased the size of businesses that can qualify for the SME Scheme of the R&D Tax Credit Programme. Now firms with up to 500 staff can potentially claim a refundable credit.
Also, the definition of qualifying R&D expenditure has been expanded to include amounts paid to clinical trial volunteers for payments made on or after 6 April 2006 under the Large Company Scheme. The date for the SME Scheme still has to be approved under the EC state aid rules.
Supporting growth in innovation: next steps for the R&D tax credit
In response to the discussion paper issued on 20 July 2005, the Government will begin implementing a package of measures, including:
- the creation of dedicated R&D units within HMRC to ensure that all R&D tax credit claims are dealt with by specialist HMRC staff, expanding on the recommendation of the Cox review;
- an R&D tax credit statement of practice for SMEs, detailing how SMEs can expect HMRC to deal with their claims; and
Accountancyage
Government Crackdown On R&D Tax Credit ClaimsHM Revenue & Customs have begun a process of reviewing past R&D tax credit claims after the recent BE Studios case in which thousands of pounds were claimed in error.
HM Treasury issues discussion paper
Supporting growth in innovation: enhancing the R&D tax creditAt the time of its 2005 Budget HM Treasury announced that it would issue a discussion paper that would invite comments from the business community as to how the delivery of the credit might be improved and enhanced. This paper has now been released. It seeks views on high-level issues surrounding the R&D tax credits. It is not intended to seek policy proposals.
16 March 2005
Chancellor Gordon Brown announced Budget 2005. A summary of the Business R&D measures appears below. This summary was written by HM Treasury.
Business R&D
3.71 Business investment in R&D rose by 2 per cent in real terms in 2003, broadly in line with the economy as a whole, but it will need to rise faster than trend growth if the UK is to catch up with competitors. The Government’s focus has been on working with business to encourage greater investment in R&D and innovation, and to promote closer collaboration between industry and the science base.
