R&D Tax Credits

The R&D Tax Credit scheme is applicable only to limited companies, both SMEs (definition: fewer than 500 employees, annual turnover below €100 million, balance sheet total not exceeding €86 million) and large companies i.e. those not qualifying as SMEs.

What qualifies as R&D?

Whilst it is difficult to offer a precise definition of what constitutes Research & Development expenditure, it is likely that financial investment which advances science or technology or provides an appreciable improvement in an existing process, material or product will probably be acceptable for R&D credit.

What is an R&D Tax Credit?

flyerimage2An R&D Tax Credit claim is based on the company’s total payment of PAYE, NIC and NIC employers’ contributions which amounts to the maximum of the actual refund, unless the company has made Corporation Tax Payments, in which case the claim is for a refund of Corporation Tax, or alternatively a combination of both.

The company wishing to make a claim can be either profitable or making a loss. Utilising surrenderable tax losses, there is the possibility of a financial repayment for a company in a loss making position.

A company must have been trading, for at least one year before an application for an R&D Tax Credit can be submitted.

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