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Research

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Computer software. Subcontracted activities. Externally ... Payable tax credit. The amount a company is entitled to for an accounting period is the lesser of: ... – PowerPoint PPT presentation

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Title: Research


1
Research Development Tax Relief
Manchester RD Unit Alan Dickinson Lee Wilson
2
What is RD tax relief?

Why was it introduced?
3
Latest statistics
HMT figures from 2000/01 to date 30,000 claims
received 2.3 billion of Government support 23.5
billion worth of expenditure supported HMRC
figures from 1 November 2007 3.36 Billion
expenditure included in claims 145 Million
payable tax credits claimed 95 of claims
processed within the time limits
4
How does it work?
  • Enhanced deduction
  • Reduces profit / increases losses
  • Two schemes SME and Large
  • Relief given to a variety of trade sectors.

5
What are the conditions?
  • Incurred expenditure (CIRD81300)
  • Not capital expenditure (CIRD81700)
  • Allowable deduction (CIRD81450)
  • Qualifying expenditure (CIRD82100)
  • Minimum spend (CIRD81600)
  • Valid claim (CIRD81800)
  • From 1 August 2008, going concern (CIRD 81130)

6
What is RD for tax purposes?
  • Advance in science or technology
  • Overall knowledge or capability in a field of
    science or technology
  • Resolution of scientific or technological
    uncertainty
  • Work in the arts, humanities and social sciences,
    including economics, is not science for the
    purposes of the relief.

7
What are the qualifying categories of expenditure?
Staffing costs
Consumable items
Computer software
Subcontracted activities
Externally provided workers
Contributions to independent research (large
scheme)
Application to clinical trials volunteers
8
How is the relief given?
  • SME scheme
  • Extra 50 (75 from 1 August 2008) deduction
  • Losses can be utilised as normal
  • Unrelieved losses (up to the amount of the
    enhanced expenditure) surrendered in return for a
    payable credit
  • Large scheme
  • Extra 25 (30 from 1 April 2008) deduction

9
Payable tax credit
  • The amount a company is entitled to for an
    accounting period is the lesser of
  • 16 of the surrenderable loss for that period,
    and
  • The companys PAYE and NIC liabilities for
    payment periods ending in that accounting period
  • Up to 24 for every 100 of qualifying expenditure

10
How is RD tax relief claimed?
  • In full company tax return at end of accounting
    period
  • The tax relief will benefit the company on its
    usual corporation tax payment date for the
    accounting period
  • The tax credit is normally paid within 28 days
    of receipt of the claim by the RD Unit

11
Contact Details
Manchester RD Unit Albert Bridge House Bridge
Street Manchester M60 9AF Tel 0161 288
6118 Email randd.manchester_at_hmrc.gsi.gov.uk www.h
mrc.gov.uk/randd/index.htm
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