Client company with year end of 31 December 2011. Let's assume there are R&D costs capitalised of £100k. For the accounting period in question, I start off by taking the £100k costs, splitting this into two periods (3 months to 31/03/11 and then the remainder) and then applying 175% relief to the pre-31/03/11 costs and 200% relief to the post-31/03/11 costs to arrive at the allowable deduction in the adjusted loss computation.
Then, when the surrenderable loss is arrived at (let's say £300k for example), again this is split into pre and post 31/03/11 figures on a days basis and the repayable tax credit is 14% and 12.5% respectively.
Once arriving at the repayable tax credit, if this figure is more than the company's PAYE and NIC liabilities for the year, the repayable credit is restricted to the PAYE and NIC per the payroll.
Does this sound correct? I am, of course, assuming all other conditions and relief within the SME scheme are applicable in this example.
Thanks for any help folks.