The amount of tax HMRC is disputing with big businesses over research and development (R&D) tax credit claims has nearly quadrupled in the past year.
The amount has increased 372% from £90 million to £425 million, says leading law firm, Pinsent Masons.
The steep rise could be suggestive of large businesses claiming increased amounts of R&D tax credits under the new, more generous Research and Development Expenditure Credit Scheme. The total amount of R&D support claimed under the scheme rose by 20% to £2.88 billion in the last year.
The new R&D tax credits system, introduced in April 2013, allows large companies to claim a cash credit from HMRC based on their qualifying R&D expenditure.
Large businesses can now claim tax relief on qualifying R&D costs of 130%. If the company has a trading loss this can be increased by 30% of the qualifying R&D costs.
Article originally published on Financial Director
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