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Covid-19 spotlights research and development (R&D). Funding initiatives like the Fast Start Competition, managed by Innovate UK, have recently been available for break-through projects in science and technology.
Covid-19 spotlights research and development (R&D). Funding initiatives like the Fast Start Competition, managed by Innovate UK, have recently been available for break-through projects in science and technology. Companies involved in R&D may also be eligible for support such as the Coronavirus Business Interruption Loan Scheme (CBILS) and the Future Fund. But how do these measures fit in the context of the R&D tax incentives available for companies generally?
There are two main types of R&D tax relief, with availability largely dependent on the size of the company. Small and medium sized enterprise (SME) R&D relief provides an enhanced 230% deduction from taxable profits for qualifying R&D expenditure. Where an R&D claim creates a loss, it may be possible to surrender this for a cash repayment, currently 14.5%, a valuable boost to cash flow in current circumstances. Research and Development Expenditure Credit (RDEC) is another valuable relief, available both to large companies, and SMEs not meeting the criteria for the SME R&D scheme. It is now worth 13% of qualifying R&D expenditure.
Covid-19 creates a number of issues for R&D claims:
Please do contact us for advice on the complexities of R&D.
Why not contact Wilkes Tranter & Co Limited today for more information or a FREE no obligation quote.
Government borrowing fell to £7.8 billion in December 2023 giving Chancellor Jeremy Hunt more scope to make the tax cuts he has hinted at in the Spring Budget.
Tax cut promises may need to be scrapped as a result of the UK being in an 'unfortunate economic and fiscal bind', the Institute for Fiscal Studies (IFS) has warned.
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