Research and Development Tax Relief
Research and Development (R&D) reliefs support companies that work on innovative projects seeking to make an advancement in science and technology and can be claimed for costs specifically relating to those projects including; staff, software and consumables.
There are two different types of Research and Development reliefs, depending on the size of the company.
Small and Medium Sized Enterprises (SMEs) can claim an extra 130% Corporation Tax deduction for their qualifying costs from their taxable profit, as well as the normal 100% deduction, to make a total 230% deduction. This can then translate into a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss.
Large companies can claim a Research and Development Expenditure Credit (RDEC) against their Corporation Tax liability for working on R&D projects, worth 13% of the qualifying R&D expenditure.
Business tax planning is vital. Here at Stephenson Smart we have built up an excellent reputation for progressive tax planning for businesses throughout the whole of the UK. Individuals operating in partnership, sole traders, UK companies and permanent establishments of foreign companies situated in the UK are all liable to pay tax in the UK on their business profits. The regime under which tax is collected differs depending upon the structure through which the business operates.
For example, a limited company will need to file a Self-Assessment tax return form called a CT600, while a partnership will need to file a Self-Assessment partnership return called a SA800. Sole traders and individual partners of partnerships will file Self-Assessment tax returns called SA100.
The responsibility of the correct calculation of business profits contained within each of the Self-Assessment tax returns filed in the UK rests solely with the taxpayer.
Stephenson Smart are able to assist in formulating and submitting calculations of business profits compliant with the latest changes in legislation, making the most of deductions and allowances available to the business. In most cases we can reduce the amount of tax paid and maximise the wealth of the company and/or individuals.
Corporation tax returns need to be filed online in iXBRL format. Filing returns late will result in a penalty and interest on late paid corporation tax will accrue. We are here to ensure that all returns are submitted on time, in the correct format and that all deadlines are met.
Business expenditure of a capital nature is not always tax deductible, but may qualify for capital allowances. There is a wide variety of capital allowances available for capital expenditure depending upon the nature of the capital asset purchased. We will maximise the amount of capital allowances claimed, and the subsequent deduction from taxable profits will reduce your tax liability. Working together with your business we will keep you up to date with tax legislation affecting capital allowances available and ensure that your tax liability is minimised.
We can offer advice specific to you and your needs on an individual basis in relation, but not limited to, the following events:
- Advice on Corporation tax payments and their timing, whether in instalments or single transactions.
- Calculation and submission of company tax returns in required iXBRL format.
- Maximisation of research and development tax credits and administering the repayment of tax losses.
- Maximising capital allowances, in some cases obtaining 100% allowances through utilisation of the Annual Investment allowance and Enhanced Capital allowances.
- Maximising relief for expenditure on intangible assets and goodwill.
- Reconstructions of businesses and groups, including mergers and acquisitions both within the UK and internationally.
- Effective loss relief planning including group relief to maximise the potential of your business.
- Advice relating to company strategy such as directors remuneration planning and dividend policy.
Call us today to see how Stephenson Smart can help your business.