Dear all,
A company has trading profits before enhanced R&D relief of say £60,00
The enhanced R&D claim (i.e. 125% uplife in this case) is £60,000.
It also has trading losses brought forward of in excess of £500,000
My question is, if the company makes an enhanced R&D claim, is this deducted from profits before the losses brought forward such that profits reduced to NIL and losses preserved?
Or, can the losses brought forward be used to cover the taxable profits before enhanced relief, thereby enabling the company to surrender the £60,000 R&D losses for a cash repayment from HMRC?
Replies (2)
Please login or register to join the discussion.
No
The claim is treated as a deduction in computing current year profits - before offset of losses brought forward or back.
.
I understand the R&D enhanced deduction to be deducted before the losses brought forward so that in your example there would be no R&D losses to surrender back to HMRC for cash.
The brought forward losses are therefore preserved.