News and Views
Is your company entitled to relief for Research and Development expenditure?

In his budget in March 1999 the Chancellor announced new reliefs for expenditure on research and development. These were initially restricted to larger companies but have since been extended to all companies. Unincorporated businesses can also benefit from a reduced relief. Further improvements have been proposed in the 2003 budget.

Broadly Research and Development Expenditure is spending, on materials or staff time, on developing new products or technologies. There must be innovation or new ground being broken.

The reliefs available include:

An allowance of 150% (125% for large companies) of the amount expended, or if no profits are available to utilise this;
A repayable tax credit of up to 24% of the amount expended (not available for large companies)

There has to be a minimum of £25,000 expenditure in a twelve-month period to qualify for the higher reliefs. Lesser amounts still qualify for reduced relief. There is a proposal in the 2003 budget to reduce this limit to £10,000.

If you think your business may have incurred expenditure eligible for the relief, please contact Chris Wright to discuss your claim.