Chancellor announces increase in rate of R&D tax credit to 14.5% for loss making SMEs from April 2014
In his 2014 Budget, the Chancellor announced that the rate of payable R&D tax credit for loss making SMEs will increase from 11% to 14.5% for qualifying expenditure incurred on or after 1 April 2014.
The increase in payable R&D tax credit means that loss-making SMEs will now be able to claim nearly a third of their eligible R&D expenditure in the form of a cash credit from HMRC (previously the credit equated to approximately a quarter of the qualifying expenditure).
Broadly, a SME for these purposes is a company with fewer than 500 employees and either annual turnover of less than €100m or gross assets of less than €86m. Companies in a group must take into account the aggregate figures of the group when considering these limits.
The measure is intended to provide further incentives to small companies who invest in R&D activities and is consistent with the government’s objective to support small innovative companies with the potential for high growth.
For further details in respect of R&D tax relief, or to arrange a free initial discussion, please contact David Clift in our Gloucester office on 01452 634800.