Relief: SME companies can benefit from a reduction in Corporation Tax equivalent to 25% of R&D expenditure.
Credit: SME companies in a loss-making position can surrender those losses to claim a cash Tax Credit of up to 33% of R&D expenditure.
The RDEC (Research & Development Expenditure Credit) scheme was introduced in 2013 to replace the previous Large Company Scheme for R&D tax credits. This scheme is less generous than the SME scheme with the net benefit at around 10% of the R&D expenditure. RDEC is designed for larger companies that do not meet the SME criteria. However, SMEs can also claim under the RDEC scheme if this is not possible under the SME scheme, for example when an SME receives notified state aid to fund an R&D project.
From 1 April 2024, the headline rate for a profitable company with be 20% with the post tax rate between 15% or 16.2%.
SME intensive scheme: Companies that qualify as SME intensive for accounting periods starting 1 April 2023 can claim a benefit of up to 27%.
A reduced corporation tax rate of 10% is placed on profits stemming from patented technologies.
We understand that often SMEs simply don’t have the time or the resources to organise making these claims themselves. That’s why we offer our R&D consultancy service where we can do all the hard work for you, while you focus on running your business. Our team of R&D tax relief consultants will take care of all the necessary paperwork and work with the relevant parties to ensure that you get maximum financial benefit from your R&D projectselow to learn more about our process.
“Having worked with Optimal Compliance, it created a sort of paradigm shift in how we’re going to approach projects in the future. For Red Deer, claiming R&D tax relief helped hugely. We are now attacking unknowns head-on, which not only makes the projects we do a lot more interesting and widens the scope of our work, but we are also actively pushing the boundaries of what is architecturally possible.”
Lionel
Director at Red Deer
