Research and Development (R&D) Tax Credit
If a company spends money on research and development activities, these activities may qualify for the R&D Tax Credit.
The credit is calculated at 25% of qualifying expenditure and is used to reduce a company’s Corporation Tax (CT). Where a company has offset current and previous years’ CT liabilities, it may apply for a credit payable in instalments.
To qualify for the R&D Tax Credit, a company must carry out research and development activities that meet the following conditions.
The research and development activity must:
- involve systemic, investigative or experimental activities
- be in the field of science or technology
- involve one or more of these categories of R&D:
- basic research
- applied research
- experimental development
- seek to make scientific or technological advancement
- involve the resolution of scientific or technological uncertainty.
The credit has to be claimed within 12 months of the year end in which the qualifying R & D was undertaken
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