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If you have spent money on qualifying innovative activities in the past two years you can reduce your company’s corporation tax bill an extra 86% of the amount you spent on the innovation.
Under these rules at the most simple level for every £1 on R&D activities spent you will receive 21.5p in tax relief.
In the example the business has spent £17,900 in qualifying Research and Development Tax expenditure.
This expenditure is multiplied by 86% to give the enhanced expenditure amount of £15,394.
The enhanced expenditure is then subtracted off of the company's profit figure of £30,000. This leaves the company with a reduced profit level before tax of £14,606.
This reduces their Corporation Tax bill from £5,700 to £2,775 resulting in a total tax saving of £2,925.
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To find out if your project or innovation qualifies under the R&D SME scheme and how it can help your business, get in touch for a Free, No Obligation Evaluation. Start claiming R&D Tax Credits today.
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