Research and Development (R&D) tax relief

Research and development (R&D) tax relief and credits give a tax advantage to both small and medium sized enterprises (SMEs) and large companies undertaking qualifying activities. Our specialist team of advisers deal with claims in a wide range of sectors.

R&D tax relief is a government incentive to encourage companies to invest in R&D activities by claiming relief on qualifying costs.

R&D activities are not confined to companies in the technology sector. We make claims for companies across a range of sectors including:

• Manufacturing
• Engineering
• Construction
• Automotive
• Pharmaceutical
• Software

Maximising your company's claim

Talk to us about making a claim or increasing your claim if your company carries out activities which include:

• Seeking to resolve technological uncertainties
• Seeking to make technological advancements

There is a time limit of two years from the end of the accounting period to submit an R&D claim with the return.

The rates of relief are:

• 200% of the qualifying R&D costs may be claimed, as a tax deduction by SMEs, for expenditure incurred on or after 1 April 2011 (175% for expenditure incurred from 1 August 2008 to 31 March 2011), and increasing to 225% for expenditure incurred on or after 1 April 2012.
• 130% of qualifying costs for large companies (125% for expenditure prior to 1 April 2008).

In addition, SMEs may choose to "trade in" their R&D losses and receive 25p (24.5p for expenditure incurred from 1 August 2008 to 31 March 2011) for each £1 spent on qualifying R&D.

100% allowances are also available on R&D capital expenditure.

The Budget 2011 also announced further changes to the rules which are anticipated to come into effect from 1 April 2012.

We will help you to put together a robust claim, either as a stand alone project or as part of a wider tax compliance service. Our excellent reputation with HM Revenue and Customs (HMRC) and our established relationships with the new R&D units within HMRC put our clients in a strong position.

The Government published their response to the recent consultation on R&D tax credits on 10 June 2011. Watch our webcast featuring Head of Tax Francesca Lagerberg and Head of R&D Tax Samantha Vanags as they discuss the further questions raised in the response document. Viewers will have the opportunity to comment and ask questions and a full response to the consultation document will be prepared as a result of the webcast by Grant Thornton and submitted to the Government.

A briefing paper providing a summary of the recently published response and further questions the Government is putting to the industry before finalising its proposed changes to the schemes is also downloadable as a PDF.