SME R&D

SME R&D

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Before the 1st April 2011 we took advantage to claim for our own R&D in house development expenditure by claiming an enhancement to the in house development of the software development for the particular R&D.

The Attributable R&D costs were £147,370 less 35% subcontractor Costs gave £118,543 attributable to R&D Enhancement

Taking the £118,543 x 75% enhancement gives £88,907 research and development enhanced deduction which was put into our June 2010 corporation tax return.

The Software was also capitalised as an intangible Asset in the same period for £147,370, can this £147,370 be used for the current year or future years capital allowance calculations as the £147,370 has been omited from the June 2010 capital allowance calculation and future calculations.

I would have thought technically we can  (in affect we have increased profits in the business by taking out the £147,370 out of the P&L allowable expenditure to corp tax) and should add the £147,370 into our corp tax capital allowance calculation.

Any feed back would be greatly appreciated.

 

 

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By Domant
14th Mar 2013 19:00

There is specific relief to take the deduction in the tax computation for eligible revenue expenditure that is capitalised such as this in the year it is incurred. The amortisation is added back if and when charged. You can still claim the R&D credit.

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