R&D tax relief is a tax relief for companies who are developing new or improved products or processes. The relief can give tax savings of up to £28.75 for every £100 of “qualifying expenditure”.
With £1.2 billion of relief claimed by companies in 2011/12, R&D schemes continue to be a very significant source of funding for companies developing new or improved products or processes.
Overall claims for R&D tax relief rose by 16.5% in 2011/12, the latest year for which figures are available. This represents continued growth in the uptake of reliefs offered for R&D expenditure since the schemes were first introduced in 2000. The rate of increase in the number of claims has more than doubled compared to the previous year. SME companies show the highest increase with 20% more companies making a claim than in the previous year.
While the number and value of claims has increased year on year, R&D tax relief continues to be under-claimed. The relief saves cash which gives companies making a claim an important cost advantage over their competitors.
The increase in the take up of the relief should continue as a result of improvements in the scheme over recent years. Qualifying expenditure now receives a 225% super-deduction and the new Above The Line credit is available to Large companies from 1 April 2013. Companies who have decided not to claim in the past are now looking again.
The publicity surrounding the “Patent Box” is also attracting more attention to the tax reliefs available to innovative companies. Companies are looking into the Patent Box and discovering valid R&D claims have not been made. Again this should fuel an increase in the number of claimants. If you are applying for a patent you should also look into making a claim for R&D tax reliefs.
Now is the time for you to take action if you are not already taking full advantage. The relief must be claimed so positive action must be taken. Mazars have specialists who can assist you in maximising your claim - click here to arrange a free telephone consultation.