Question regarding tax relief on r&d etc

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VectraMan replied

24 March 2007, 09:57
Originally posted by nucastle

So how does this new tax relief work then?

Say i have 10 grand in a corporate bank account ... assuming 100% relief - does that mean as long as i 'invest' 22% of that ... then that cancels out my corporation tax liability for that year (for that 10 grand).

Go easy on me - Gordon Brown is a confusing fellow.

I don't know where you get the 22% from. You get 150% relief, which I think means if you spend £10K on R&D you've reduced your overall liability for CT by £15K, and so reduce your CT bill by 22% of that - i.e. £3300 less. But then you've had to spend £10K to get there. So good if you genuinely do R&D, not very useful for the likes of us.

And you need to spend at least £10K:

http://www.dti.gov.uk/innovation/ran...page11350.html

What I guess you could do, is if you found yourself on the bench for 6 months, claim you're doing R&D. And then the government will pay some of your salary.
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themistry replied

23 March 2007, 22:46
Originally posted by Bluebird

does that mean therefore that I could "invest" [ as they say above 22% ] in say a training course as part of company enhancement.

The net effect is that the company post tax profit is the same and I've had a traing course for free ?

This is a really interesting proposition. I would hope it can be the case, there will be alot more contractors getting trained thats for sure!!

TM
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Bluebird replied

23 March 2007, 14:37
does that mean therefore that I could "invest" [ as they say above 22% ] in say a training course as part of company enhancement.

The net effect is that the company post tax profit is the same and I've had a traing course for free ?
Leave a comment:
Sockpuppet replied

23 March 2007, 14:28
I believe so. Depends what you are going to "invest" it in. Its probably a good idea for businesses who spend of R&D but as a way to get tax out of the business then I doubt its any good.
Leave a comment:
nucastle started a topic Question regarding tax relief on r&d etc

23 March 2007, 14:21
Question regarding tax relief on r&d etc

So how does this new tax relief work then?

Say i have 10 grand in a corporate bank account ... assuming 100% relief - does that mean as long as i 'invest' 22% of that ... then that cancels out my corporation tax liability for that year (for that 10 grand).

Go easy on me - Gordon Brown is a confusing fellow.
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