Companies that Invest in developing new products, processes or services; enhancing existing ones or are using an innovative alternative to their industry standard approach will be eligible for a cash payment and or Corporation Tax reduction.
If you meet the requirements, you can claim R&D Tax Relief for your last two accounting periods. For example, while in your 2018 accounting period, you can consider your R&D tax credit 2017 and your R&D tax credit 2016.
They are considered based on your spend on R&D. Qualifying expenditure is identified and increased by the appropriate rate to produce your ‘enhanced expenditure’. When deducted from your taxable profits, or added to your loss, this will give you a Corporation Tax reduction if your company is in profit, a cash credit if your company is loss-making or a combination of both. On average, 33p in the £1 of all qualifying costs can be claimed back.