Tax Reform on Research & Development Tax Relief could create thousands of jobs in the UK !

At a time where record unemployment figures have been announced, reforms to Research and Development (R&D) Tax Relief could create 7,735 new jobs, according to the manufacturing body EEF that is proposing the changes.

R&D Relief is a Corporation Tax relief that may reduce your company or organisation's tax bill by more than your actual expenditure on allowable R&D costs. Alternatively, if your company or organisation is small or medium-sized, you may be able to choose to receive a tax credit instead, by way of a cash sum paid by HM Revenue & Customs. However, your company or organisation can only claim R&D Relief if it's subject to Corporation Tax.

Your company or organisation can only claim for R&D Relief if an R&D project seeks to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty - and not simply an advance in its own state of knowledge or capability. It is a very useful and understated relief that if applied to your company can potentially save you thousands of pounds of tax.

The changes being proposed, would involve the Government introducing a cash benefit or redeemable credit at the point that R&D costs arise, rather than allowing them to be offset against corporation tax payments.
If implemented, investment in R&D would increase by £390 million, the EEF claims, which would in turn boost the manufacturing industry, enhance the UK's global competitiveness and drive economic growth.

Welcoming the proposals, which are outlined in the report 'R&D tax relief reform - an economic study', Tim Bradshaw, the CBI head of enterprise and innovation said: "This is a welcome contribution to the debate on how to build and retain high value R&D activity and jobs in the UK. The UK's international standing as a place to invest would be significantly enhanced if currently non-profitable companies could gain more immediate benefit from the R&D tax credit. This is possible by introducing a payable element for all companies."

Not only do I feel Research and Development will increase job opportunities it will also increase tax planning opportunities for new businesses. It is a win win situation and at present most of the claims to HMRC has been approved in relation to R & D

If you believe your company could benefit from research and development tax relief please do not hesitate to get in touch and I can assist you with the claim. mitch@ljd.uk.com

Mitch the Tax Man