Research and Development Allowances (RDAs), also referred to as Research and Development capital Allowances enable businesses to claim 100% of its capital expenditure on R&D facilities, laboratories, plant and machinery, company cars for R&D staff, IT systems or on refurbishing a development facility against a corporation’s tax liability. This allows release of cash into a business as all R&D spending on fixed assets is written off in year one.
The Benefits
- The main benefit of RDA’s is that they can give 100% tax relief on items for which no capital allowances (or AIA) is normally claimable – such as a laboratory used for research
- There is no upper limit on the amount which can be claimed (unlike AIA)
RDAs are especially useful for larger companies that are spending over the AIA threshold or purchasing capital items not covered by AIA, such as buildings.
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