19th December 2017
In under 2 weeks' time, larger businesses will be able to claim an increased tax relief on their qualifying research and development (R&D) expenditure.
From 1 January 2018, the rate of the research and development expenditure credit (RDEC) will increase from 11% to 12%.
The RDEC is a standalone and above the line credit that is brought into account as a receipt in calculating profits.
It allows companies to claim an enhanced corporation tax deduction or payable credit on their R&D costs.
Figures released by the Treasury in September 2017 showed qualifying spending on R&D from businesses rose to around £23 billion in the 12 months to 5 April 2016.
Since R&D schemes were launched in 2000/01, more than 170,000 claims were made with around £16.5 billion in tax relief claimed.
The increase to the RDEC was announced in the Autumn Budget 2017, as a part of the Industrial Strategy's objectives to increase productivity and growth.
In his Autumn Budget 2017 speech, chancellor Philip Hammond said:
"We are allocating a further £2.3 billion for investment in R&D, and we'll increase the main R&D tax credit [the RDEC] to 12%, taking the first strides towards the ambition of our Industrial Strategy to drive up R&D investment across the economy to 2.4% of GDP."
Talk to us about tax reliefs for your business.