Research and Development Credits and Allowances
Our R&D claims are always led by our engineers and scientists. This approach is recognised and valued by HMRC who prefer claims led by the technological and scientific aspects of a project.
Types of R&D tax credit
There are two R&D tax credit schemes in the UK.
- SME scheme; delivers approximately 33% of qualifying expenditure as refundable tax credits
- Large company scheme (RDEC); delivers 10.5% of qualifying expenditure as refundable tax credits
Qualifying for these schemes can be complicated, especially if your company structures are more complex. Our awareness and understanding of the underlying tax legislation and EU guidance is invaluable.
Research and Development Allowances (RDAs)
RDAs are 100% first year allowances whereby a full tax deduction against annual profits. These can be triggered for the cost of capital items (including computer hardware, equipment, buildings and cars), that are employed by staff intending to carry out R&D. Claims for RDAs are closely connected to claims for R&D tax credits.
The major opportunity for businesses is where buildings are used for R&D as achieving this tax deduction can be quite beneficial.
Our R&D team will carry out a meticulous review of these capital costs for you as part of their work on R&D tax credits and ensure that your RDA claims are comprehensive. Where necessary, we work with our specialist Capital Allowances team.
International R&D tax credits
Over 60 countries worldwide operate a version of R&D tax credits within their tax rules. Some countries provide relief within corporate tax rules while others operate within employment tax rules. However, the technological and scientific definitions of R&D for all countries have been driven by the Organisation for Economic Co-operation and Development (OECD). This means that all the countries tend to use broadly similar criteria for qualifying R&D projects.
The BDO international network means we can advise on and assess R&D activity in every jurisdiction relevant to you with a view to claiming R&D tax reliefs. In particular, our specialists have experience in the USA, Canada, France, Ireland, Belgium, The Netherlands, Australia and Israel. This specialism is expanding with the recent introduction of R&D Reliefs to New Zealand and Germany.