The latest R&D reforms were said to simplify the tax regime and encourage business investment. The reality though is more complexity, writes Justine Dignam (Markel Tax).
Recent changes
Following the recent Autumn Statement we now have confirmation of the following key changes to R&D tax reliefs:
The merged R&D scheme will go ahead from the 1 April 2024. This will take effect for accounting periods starting on or after that date. This is effectively the current research and development expenditure credit (RDEC) scheme and replaces the SME scheme for most companies.
A 20% gross credit will be taxed at main rate up to 25% of corporation tax for most profitable companies.
For loss-making companies the tax credit will be charged at 19% corporation tax. This means the rate of relief is slightly higher for loss-making company than for a profitable one.
For a profitable company ...
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The latest R&D reforms were said to simplify the tax regime and encourage business investment. The reality though is more complexity, writes Justine Dignam (Markel Tax).
Recent changes
Following the recent Autumn Statement we now have confirmation of the following key changes to R&D tax reliefs:
The merged R&D scheme will go ahead from the 1 April 2024. This will take effect for accounting periods starting on or after that date. This is effectively the current research and development expenditure credit (RDEC) scheme and replaces the SME scheme for most companies.
A 20% gross credit will be taxed at main rate up to 25% of corporation tax for most profitable companies.
For loss-making companies the tax credit will be charged at 19% corporation tax. This means the rate of relief is slightly higher for loss-making company than for a profitable one.
For a profitable company ...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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