If you’ve been claiming R&D relief at the large company super-deduction rate of 130% then you should be aware that this relief ends for expenditure incurred after 31 March 2016.
Whilst this is predominantly an issue for large companies, many SMEs will also find themselves claiming at the large company rate for expenditure that is subsidised, has hit the Aid cap or that has been subcontracted to them by a large company. They too will be affected by the changes.
These changes have been coming for the last three years and many companies may already have switched to the new system of relief. For those that haven’t already switched, from 1 April 2016 they will have no choice (other than not to claim at all, which would seem a little extreme).
The new relief, to which we have been transitioning since 2013, is the R&D Expenditure Credit (RDEC for short). The RDEC, which is actually slightly more valuable than the old superdeduction relief, uses exactly the same definitions of qualifying R&D and eligible expenditure. It delivers the relief in a very different manner, however, so it will take a little bit of getting used to. If you’re interested in finding out a little more about RDEC then do read this information sheet on the subject.
Alternatively, if you would like to discuss the impact on your (or your clients’) R&D claims, please do contact me.