R&D Tax Credits Question

Newbie

I have a client with a limited company wanting to claim R&D tax credits, according to HMRC guidance he appears to qualify, however he has asked if R&D costs incurred before the (new) limited company was formed would be eligible, I called the R&D tax credits helpline who advised the answer is no, however client has found the following which appears to conflict http://www.hmrc.gov.uk/manuals/cirdmanual/CIRD91100.htm

Dcollins

Not sure that link is the right one. Try CIRD81450, which says:

"CTA09/S1044(5) & CTA09/S1063(4)

The statute provides that, to be eligible for relief, expenditure within the qualifying categories must have been allowable as a deduction in computing the profit of the trade for which the R&D is relevant."

If it's expenditure that would be treated as incurred on the company's first day, and the conditions for R&D tax relief are satisifed, I would include it.


Hope that helps.

JodieR

I helped collate eligible expenses for a client's R&D claim a couple of years ago and I'm pretty sure we included pre-trading expenditure & nothing was queried by HMRC. I'll have a look at see if I can find out for certain.

Benton

Large companies can apply for a Research and Development Expenditure Credit (RDEC) for working on R & D projects. It can also be claimed by SMEs and large companies that have been outsourced to R & D work by a large company. The RDEC is a tax reduction for 11% of your eligible R & D expenses.https://www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief

reader

Anyone used advanced assurance?

Did you find it useful?

https://www.gov.uk/guidance/research-and-development-tax-relief-advance-assurance