I have recently submitted an R&D tax credit claim to HMRC and they have paid less than expected. Here is my calculation...
For accounting period to 31st December 2011 Ltd Co qualifying expenditure pre 1 April 2011 was £16,000 post 75% enhancement = £28,000 R&D deduction
For accounting period to 31st December 2011 Ltd Co qualifying expenditure post 1 April 2011 was £11,000 post 100% enhancement = £22,000 R&D deduction
Taxable loss for the period (before R&D relief) were (£46,000).
I calculate the payable tax credit as...
Adjusted loss for period = (46,000) + (28,000) R&D to April 1st = (74,000)*14% = £10,360
R&D post 1st April = (22,000)*12.5% = £2,750
Total tax credit payable (assuming sufficient PAYE & NI) = (10,360+2,750) = 13,110
My calculation is based on CIRD90500 - R&D tax relief.
HMRC have adjusted my workings to calculate the payable tax credit to 1st April = 28,000*14% =£3,920 (excluding the effect of the adjusted loss).
Can someone please advise who is right?
Thanks in advance