Autumn Budget 2017 – Research and Development (R&D)

R&D tax credits were introduced for Small and Medium Sized Enterprises (SMEs) in 2000 and for large companies in 2002. R&D credits are a Corporation Tax relief used to encourage innovation and enterprise within the UK economy.

Large companies can currently claim an 11% Research and Development Expenditure Credit (RDEC) also known as an ‘above the line tax credit’ for qualifying expenditure. The Chancellor announced that this rate is to be increased to 12% with effect from 1 January 2018. This will allow large companies to claim more tax credits for their R&D expenditure and is expected to drive further investment in R&D.

SMEs can currently claim R&D tax credits of 230% for expenditure incurred on or after 1 April 2012. No increase in this tax credit was announced. A SME is a company with less than 500 employees and or either has an annual turnover under €100 million or a balance sheet under €86 million. There are also a number of other factors that must be considered such as whether the SME is part of a larger enterprise.

A few days before the Budget, the Prime Minister Theresa May also announced that the government is to invest a further £2.3 billion in R&D by 2021-22.

Posted in Corporation Tax

Exeter Accountant MJ Smith & Co

Celebrating 25 years of excellence.

Free 1st Meeting
Fixed Fees
Free Support!

Find out more

Latest News

Can we claim for marketing, entertainment and subscription costs?

The self-employed are often concerned if an expense is allowable or not for tax purposes. In this article, we will …
Read More

Basic monthly tasks if you run your own payroll

One of the most time-consuming admin tasks associated with the running a small business can be dealing with the payroll.Generally …
Read More

The end of credit card payment surcharges?

From 13 January 2018, it will become illegal for any business to charge a fee in addition to the advertised …
Read More

Twitter Feed