Benefitting from innovation: R&D tax relief
For small and medium sized companies with profits there is a “super” tax deduction. An SME spending £100,000 on eligible R&D could save tax of up to £24,700. Where the extra deduction creates or increases a tax loss it may be possible to surrender the loss and receive a cash repayment instead; equating to up to £3,335 for every £10,000.
The regime for larger companies is less generous, but nevertheless very worthwhile. Large companies (or members of large groups) can receive taxable credit of 13% of qualifying expenditure under the R&D Expenditure Credit “RDEC” scheme.