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Research and Development (R&D) costs are defined for
tax purposes in Section 837A of the Income and Corporation
Taxes Act 1988.
R&D expenditure for tax purposes takes place when a project
achieves an advance in science and technology or contributes
to resolving a scientific or technological uncertainty.
Projects that could be included in R&D therefore must
meet one or more of the criteria below:
- Advances the overall knowledge or capability in a field
of science technology.
- Makes an appreciable improvement to an existing process
and product.
- Duplicates an existing process or product but can be
produced in a fundamentally different way that improves
the process or product.
The treatment for tax depends on if the sponsoring company
is an SME (Small & Medium Enterprise) or not (under EU
rules). If your company is an SME for this purpose, up to
150% of the costs can be offset against Corporation Tax. Further
information on R&D Tax Relief can be found at:
http://www.inlandrevenue.gov.uk/randd/index.htm
.Whilst we are only too happy
to assist in the claiming of tax credits for work undertaken
by ourselves, sponsoring companies should take professional
advice (e.g. from an accountant) as to their eligibility for
R&D tax credits:
http://www.proudgoulbourn.com/
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