BEST TO KNOW ABOUT R AND D TAX CREDIT?

Research and Development tax credits are a UK government tax incentive designed to promote business investment in new, innovative technologies. Businesses can claim paid out credits as a percentage of their R & D expenditure or reduce their overall tax liability by claiming tax-deductible R & D expenses. The incentives provided to companies include research and development tax credit (R&D) grants, business development allowance, infrastructure finance charge, capital allowances, European expenditure allowance and many others.

WHAT IS R & D BUSINESS DEVELOPMENT ALLOWANCE?

R and D tax credits can be claimed for almost any research and development activity undertaken by the company. However, there are specific conditions associated with each type of credit. The most common form of grant is the R & D business development allowance. This credit is provided for any business undertaking which is carried out for the benefit of the owner or owners and carries out research, design and implementation of a business improvement project that will contribute to the growth of the firm in any area.

The other types of R and D business development allowance are generally provided for the growth of small, medium or large enterprises.

There is also a form of business development called business development assistance. This is provided as support for an owner or owners' research, design, development and implementation of a project that is in line with the needs of the firm. For this credit, the eligible business is not required to have a business premises and only the requirements of the project must be met by the project manager.

If you are seeking to claim this credit, you must ensure that the expenses related to your business activities. Also, make sure that you follow all the stipulations of the credit, such as the research or design must not be used for commercial purposes, you must ensure that the technology that you use is in accordance with the UK government's legislation and that the technology has not been patented or registered.

HOW ARE R AND D TAX CREDITS USEFUL FOR A BUSINESS?

Although these R and D tax credits can be very useful for a business in developing new products or new forms of technology, you should remember that the credits are not available for research that is not deemed essential for your firm. A complete solution to its business problems. You need to have a clear idea about what you wish to achieve through your R and D activities.