Over the last ten months the subject of research and development (R&D) tax relief has frequently made the tax press. The speculation started with the publication of the Dyson report in March 2010 (see details below). Now the government's consultation document on ‘The taxation of innovation and intellectual property’ seeks to formalise the debate and (hopefully) reach some useful conclusions. This article sets out the developments so far and considers the aspects of the regimes which are most at risk. It also provides some recommendations for future legislation.
How the UK system works
The two existing UK schemes are offered to companies on the basis of their size. Companies which meet the definition of a ‘small or medium sized enterprise’(SMEs) are entitled to a ‘super deduction’ from taxable profits of 175% of qualifying costs while large companies are entitled to a 130% deduction. SMEs...
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Over the last ten months the subject of research and development (R&D) tax relief has frequently made the tax press. The speculation started with the publication of the Dyson report in March 2010 (see details below). Now the government's consultation document on ‘The taxation of innovation and intellectual property’ seeks to formalise the debate and (hopefully) reach some useful conclusions. This article sets out the developments so far and considers the aspects of the regimes which are most at risk. It also provides some recommendations for future legislation.
How the UK system works
The two existing UK schemes are offered to companies on the basis of their size. Companies which meet the definition of a ‘small or medium sized enterprise’(SMEs) are entitled to a ‘super deduction’ from taxable profits of 175% of qualifying costs while large companies are entitled to a 130% deduction. SMEs...
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