R&D Tax Credits
Effective April 2013 the Government will introduce an above the line (ATL) R&D Tax credit. This will have a headline tax benefit rate of 10% and enable loss-making companies to claim cash credits.

  • For large companies (as classified under the rules of the R&D scheme), this change will move the R&D benefit from the tax line in a large company’s accounts to operating profit.
  • A company will therefore be able to directly offset the relief against the cost of carrying out qualifying R&D in the same was as it would with a grant.
  • The ATL credit is designed to make R&D relief more visible to those making investment decisions and provide greater cash flow support to companies with no corporation tax liability.  
  • The introduction of the ATL credit follows an increase in the rate of the small and medium-sized enterprises (SME) R&D tax credit from 175 per cent to 200 per cent from April 2011 and to 225% from April 2012, which continues to provide targeted support for early stage companies and start-ups investing in R&D in the UK.

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