Even if your business doesn't fit HMRC's definition of "small" or "medium-sized" there's still a lot of Research and Development Tax Relief on offer. The long and short of it is that if you've got an annual turnover of more than €100 million or a balance sheet of over €86 million then you need to look into either the R&D Large Company Scheme or REDEC for your R&D support.
Under the Large Company Scheme:
You can claim a tax relief rate of 130% on costs that qualify for it. If you spend £1000 on a qualifying project then the income you pay your Corporation Tax on can be reduced by an extra £300 on top of the £1,000 you spent.
If you have an allowable trading loss for that period, this can be increased by 30% of the qualifying R&D costs - £300 for each £1,000 spent. This loss can be carried forward or back in the normal way.
As with the SME R&D tax relief scheme, you still have to show that what you're doing counts as R&D. In general, though, if you're out there solving problems and pushing against the limits of science or technology then you could have a R&D tax credit claim.
It's not just SME innovators that the government's trying to support. Too many larger companies still aren't in the loop about this tax relief scheme for large companies and corporations.
You can talk to us directly or, if you prefer, ask your accountant or advisor about working with us. Many accountants refer their clients to us for our specialist knowledge, and we're always excited to meet and help new and innovative businesses. Together, we'll work out if you have a claim and show you how to make the most of it. We can even offer specialised support like running seminars for you, so get in touch with RIFT R&D today and talk us through your most imaginative ideas.
The RDEC Scheme
The RDEC scheme is available for expenditure incurred on or after 1 April 2013. The key difference between the RDEC and the Large Company scheme is that the RDEC will allow a loss making company to receive a payable tax credit.
The RDEC is a taxable receipt and it will be paid net of tax to companies with no corporation tax liability. Prior to 1 April 2015 the rate of the RDEC was 10%, so after a corporation tax deduction at 21% the net cash benefit to a large company was 7.9% of its qualifying R&D expenditure.
From 1 April 2015, the RDEC percentage was increased to 11%. So, combined with the reduction in the corporation tax rate to 20%, also from 1 April 2015, the net cash benefit to a large company is now 8.8% of its qualifying R&D expenditure.
Why not call us on 01233 653008 or contact us and see how we can help you.