FOCUSONFINANCE
Research and Development tax relief – It’s worth how much? Very few tax reliefs are as valuable as that available to companies undertaking R&D activities. The tax deduction can be worth up to 225% of the actual costs incurred. R&D tax relief is only available to limited companies, and there are two schemes - The Small or Medium-sized Enterprise (SME) Scheme, and the Large Company Scheme. The definitions on size need to be checked carefully
The SME Scheme The rate of SME R&D Relief increased from 175% to 200% for expenditure on or after 1 April 2011, and the rate increases to 225% from 1 April 2012. What this means is for every £10,000 the company spends on R&D, they save tax on double that amount! There is a minimum spend of at least £10,000 a year, but this limit disappears from 1 April 2012. And there is no upper limit! (The rates under the large company scheme are 130%)
Which costs might qualify? Subject to certain conditions, you can claim tax relief on R&D revenue expenditure - this means running costs of the business (and not capital expenditure on assets) such as: • Employee costs • Materials
Which R&D projects might
• Utilities
qualify?
• Software • Subcontracted R&D expenditure.
The R&D Relief can only be claimed if a project seeks to achieve an advance in overall knowledge or
Wilkins Kennedy’s 12 regional office structure is to be enhanced with the proposed opening of an office in Discovery Park, the former Pfizers location, from early summer of 2013. The partners feel this is an exciting opportunity to facilitate business advice and financial reporting to businesses in East Kent.
capability in a field of science or technology, and is not simply an advance in its own state of knowledge or capability. For professional help and advice on how you can minimise your tax in 2013, please contact your local Wilkins Kennedy office in Ashford or Orpington. 6
ThinkingBUSINESS June-July 2013
Wilkins Kennedy FKC Stourside Place, 35-41 Station Road, Ashford, Kent TN23 1PP Tel: 01233 629255 Email: ashford@wilkinskennedy.com Website: www.wilkinskennedy.com