R&D Tax Credits
What's it worth?
As shown by the following table, R&D tax credits can be a valuable source of assistance to both SMEs and Large Companies.
| From 1 April 2008 to 1 April 2011 | |
|---|---|
| Large companies: | Can recover up to 8.4% of eligible expenditure. |
| From 1 August 2008 to 1 April 2011 | |
| SMEs (in profit): | Can recover up to 21% of eligible expenditure. |
| SMEs (loss-making): | Can recover up to 24.5% of eligible expenditure. |
So if a loss-making SME spends £100k on eligible work, it would receive up to £24.5k as an R&D tax credit. A large company spending £1m would receive up to £84k of tax benefit.
What is ‘eligible expenditure’?
Eligible expenditure is what you spend on eligible projects, on certain categories of expense. Generally, companies can claim for staff costs, software, subcontractor costs (SME only) and raw materials that are consumed during your projects.
What is an SME and a large company?
Broadly speaking, an SME is a company with up to 500 people, with revenues that do not exceed €100m or assets that do not exceed €86m. A large company is any company that does not pass these tests. At Jumpstart, we work with both.