If your company or organisation is small or medium-sized undertaking projects which seeks to achieve an advance in science and technology, you may be able to receive a tax credit, by way of a cash sum paid by HM Revenue & Customs (HMRC). But your company or organisation can only claim R&D Relief if it's liable for Corporation Tax.
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R&D activities are those which directly contribute to advance through resolution of scientific or technological uncertainty. As the HMRC definition of R&D states ‘seeks’, it means that even if your project is a “failure” it still counts as R&D. R&D also includes news and/or improved process set up in the company i.e. to reduce waste or to make the product more sustainable.
To qualify for R &D Tax Relief you must be a Limited company and have been trading for more than 1 year
The Small and Medium-sized Enterprise Scheme
From 1 August 2008, the tax relief on allowable R&D costs is 175 per cent - that is, for each £100 of qualifying costs, your company or organisation could have the income on which Corporation Tax is paid reduced by an additional £75 on top of the £100 spent. It also includes a payable credit in some circumstances.
Which R&D projects might qualify for Relief?
Your company or organisation can only claim for R&D Relief if an R&D project seeks to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty - and not simply an advance in its own state of knowledge or capability.
If you are taking part in a KTP scheme you can claim the KTP associate as a subcontractor and have tax relief at 65%, you can also include the percentage of time other staff spend working with the associate.
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