I am dealing with R&D tax credits and I understand the revenue element but I am a little unclear on the capital expenditure. If a company wants to buy equipment which will be fully used on R&D do they make a claim under R&D Allowances therefore claiming 100% (unlike the revenue R&D tax credits)? HMRC states it should be a trade expense, therefore do I not need to capitalise and depreciate as normal? The expenditure is £3000 so can I assume that this will not form part of the Annual Investment Allowance?
Apologies for my inexperience, but any shared experiences would be gratefully received.
Thank you in advance.
Caz
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Thanks..
Thanks Gary,
But can you confirm if the capital expenditure is treated as any other asset and therefore depreciated over its useful life in the balance sheet?
Thanks for your help.
Capital Allowances Manual
http://www.hmrc.gov.uk/manuals/camanual/CA60000.htm
Should tell you all that you need to know
It is a 100% first year allowance so no need to use the AIA for this.