23rd May 2018

Update on Research & Development

Since the Autumn Budget of 2017 there has been an increased rate of the Research & Development expenditure credit

This measure increased the tax relief for companies that carry out qualifying Research & Development and claim the expenditure credits (RDEC).

11% was the previous general rate of qualifying R&D. This rate of the RDEC increased from 11% to 12%.

The increase in R&D carried out by companies rate is part of the government’s aim to increase productivity and growth.

R&D tax credits support business investment. Therefore companies can claim an enhanced Corporation Tax deduction or payable credit on their R&D.

The rate increase means that large companies can claim more support for their R&D. This increases the incentive to undertake R&D.

Reference: https://www.gov.uk/government/publications/corporation-tax-increasing-the-rate-of-research-and-development-expenditure-credit/corporation-tax-increasing-the-rate-of-research-and-development-expenditure-credit