Last week HMRC announced a new Advance Assurance facility for small companies who are considering making an R&D claim but are nervous about the risk of it being challenged.
R&D relief works by giving SMEs a ‘super deduction’ against their profits chargeable to corporation tax of 230% of their qualifying R&D expenditure. This relief provides additional tax relief worth approximately 25 pence for every £1 spent on R&D.
From 1 December onwards, companies with a turnover of less than £2 million and fewer than 50 employees who are looking to make their first claim can apply to have their R&D project(s) pre-assessed by HMRC’s specialist R&D units. The advantage of Advance Assurance is that, if the application is successful, HMRC will guarantee that the first three accounting periods of claiming the relief will be accepted without risk of enquiry.
Regular tax-biters will know how often we hammer home the point about the under-utilisation of R&D claims. The introduction of the advance assurance facility serves to highlight this message further. Companies of all sizes should really give serious thought to the possibility of making an R&D claim!
Forbes Dawson has an in-house team of R&D specialists and are able to deal with all types of R&D claims, including applications for Advance Assurance. For further details speak to Tom Minnikin (0161 927 3856) or your usual contact.
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