Increase to R&D Tax Credits for SMEs

August 21st, 2014

Gill Molloy Champion Accountants

Budget 2014 introduced new measures affecting loss making SMEs undertaking research and development activities. Group Tax Director Gill Molloy explains how businesses could now recover up to 32.6% of costs.

Loss making SMEs with no corporation tax liability could be eligible for a cash payment, known as a “Research & Development (R&D) Tax Credit”.

In this year’s Budget, an increase to the R&D Tax Credit rate was announced, meaning loss making SMEs undertaking R&D activities can now claim a cash sum of up to 32.6% of qualifying expenditure. The increase took effect from 1 April 2014.

Aside from making this relief significantly more valuable, the increase has provided further incentive for SMEs to invest in R&D and will be particularly beneficial to small, innovative, high risk, high growth companies.

Is my business undertaking R&D?

Some common misconceptions surrounding R&D Tax Credits is that they are only relevant to companies who are developing something completely new from scratch, or only companies operating in industries such a biotechnology, software and pharmaceutical.

However, as many businesses are unknowingly undertaking projects which meet HMRCs definition of R&D, you should consider the following questions:

If you think you may qualify for R&D relief and would like to discuss things further, please contact Gill Molloy on 0161 703 2500 or e-mail gill.molloy@championgroup.co.uk


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