ABSTRACT

Research and Development (R&D) tax relief, or credit, is a Corporation Tax benefit that can either reduce a company’s tax bill or, in some circumstances, provide a cash sum. It is based on the company’s expenditure on R&D. R&D tax relief/credits are aimed at encouraging expenditure by companies on innovative activities that advance the overall knowledge or capability in the fields of science and technology. The tax credits consist of additional tax relief beyond the amount of the expenditure incurred on qualifying R&D activities and are given against Corporation Tax. In some situations, where the company is making losses, the tax credits can be surrendered for a cash payment.