Innovation Tax Reliefs
At TAP we provide Innovation Tax Reliefs services with a difference. We offer a unique blend of technical expertise, experience, and a delivery approach where the client’s needs are our priority.
Financial Reliefs or Incentives
HMRC provide a number of financial reliefs or incentives to encourage businesses to invest in innovation. These include:
- Research & Development (R&D) Tax Reliefs or credits and R&D allowances (RDA)
- Patent Box
- Innovation and growth grants
- Intellectual property and creative sector
R&D Tax Reliefs provide tax deduction for smaller and medium sized businesses (SMEs) under the SME scheme, or a Research and Development Expenditure Credit (RDEC) for large companies qualifying R&D expenditure. Often these reliefs are also collectively referred as R&D tax credits.
The merged scheme R&D expenditure credit (RDEC) and enhanced R&D intensive support (ERIS) replace the old RDEC and small and medium-sized enterprise (SME) schemes for accounting periods beginning on or after 1 April 2024. The expenditure rules for both are the same, but the calculation is different.
The calculation and the payment steps of the merged scheme RDEC are broadly the same as the old RDEC scheme, however a lower rate of notional tax restriction at step 2 of the payment steps is available to small profit-makers and loss-makers and a more generous PAYE cap applies. Click here to use our calculator.
The table below summarises. the potential tax benefit for to be gained under the schemes.
- associated costs.
- Testing and refining components – R&DTR can also be claimed for testing high-performance parts, including aerodynamics, tyres, and braking systems, if the testing contributes to scientific or technological advancement.
By claiming R&D Tax Relief, companies can free up valuable resources to push the boundaries of innovation without bearing the full financial burden.
Our innovation reliefs team have experience and expertise in motorsport R&D. Please contact us for a free consultation by calling either 02080371030 or by completing the online enquiry form on the bottom of this page.
Innovation Tax Reliefs Team
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