All above the line?

Written by Simon Marsh on 24 November 2016

Raising productivity was identified as a central long-term economic challenge facing the UK and a key focus for the forthcoming Industrial Strategy. The Chancellor announced enhancement to Research & Development (R&D) Tax Credit schemes that will aim to improve productivity in the UK, as part of a package which will reach £2bn of support for Research & Development by 2021.

The UK’s R&D Tax Credit schemes are already amongst the most generous worldwide and the Chancellor has the opportunity to make them even more may advantageous as part of Brexit.

The improvements announced are to the “above the line” scheme of Research and Development Expenditure Credit, which currently allows companies to claim up to 8.8% of expenditure on R&D projects from HM Revenue & Customs.

The “above the line” scheme was introduced in 2013 and currently operates alongside the even more advantageous SME R&D Tax Credit Scheme under which SME’s can recover up to 33% of R&D expenditure, including that rarity of a cash payment from HMRC.

Whilst the benefits of the scheme are expected to be increased, the current two year time limit for submitting a claim is not expected to change.

Our experience in recent years clearly indicates that many SME’s are undertaking research and development without realising they are eligible to make a claim and are missing out on substantial tax rebates and cash payments. We will be pleased to help you determine if your company’s expenditure is eligible and show how to make a claim.