Get in touch
Accountants & Business Advisers

R&D and Patent Box

Research and development tax relief is a generous incentive and can either reduce a company’s corporate tax liability or, provide a sizeable cash rebate. As such it can represent an alternative, and often vital source of funding.

R&D Tax Relief

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.

Read more
Patent Box

The patent box regime offers a 10% corporation tax rate on profits generated from UK and/or European patents and could lead to significant tax savings.

Maximising the opportunity to gain benefit from this regime requires some careful consideration including:

Patent ownership requirements – the reduced tax rates may encourage some companies to patent when previously they hadn’t. They need to factor in the time it takes to file a patent application and the time delays before grant of the patent.

Read more