R&D tax credit increased for small business | AccountingWEB

R&D tax credit increased for small business

Small businesses and start-ups that do research and development (R&D) will receive more cash from HMRC, Chancellor George Osborne announced in the Budget.

From 1 April 2014, the tax credit for loss-making small and medium-sized businesses will be increased from 11% to 14.5%. The tax credit - paid in cash - is to encourage businesses to invest and innovate.

Around 10,000 small businesses...


» Register now

The full article is available to registered AccountingWEB members only. To read the rest of this article you’ll need to login or register.

Registration is FREE and allows you to view all content, ask questions, comment and much more.


Combined with the AIA......

increase to £500k, there is the real possibility that the increase in the R&D Tax Credit rate to 14.5% could actually be of significant benefit to more than just loss-making, start-ups. Significant entities could turn their taxable profit into a loss if they have acquired eligible plant and machinery doing the year and were performing R&D. Effectively, you could be claiming up to 33% of your R&D costs as a tax credit.

R_DTaxCreditsBristol's picture

Great news for loss-making businesses

R_DTaxCreditsBristol | | Permalink

As this article doesn't really make clear, the scale of the benefit for a loss making business has increased considerably. A loss making business investing £100k in eligible R&D activity can now claim up to £32,625 as a cash credit, an increase of 16%. A profitable company can claim up to around 25% back under the scheme.


pbolton | | Permalink

Could someone please clarify - is it 14.5% of the loss or 14.5% of the enhanced R&D expenditure (or maybe even the lower of the 2!?).  e.g. profit £50k, turned into a loss of £150k after R&D of £200k.  Is the 14.5% against the £150k or the £200k?