Wednesday 21 March 2012
The Chancellor has confirmed his intention, as announced in the Autumn Statement, to introduce an Above the Line (“ATL”) Credit for qualifying Research & Development expenditure for large companies.
In addition, it has been confirmed by that the rate of the ATL credit will be at least 9.1% before tax, and that loss making companies will be able to claim a payable credit.
David Woodward, head of the R&D Tax group at KPMG said:
“The ATL R&D credit turns a tax credit into income for the company and makes the benefit more visible to decision makers. This has been lobbied for by UK business and is a really positive move for UK competiveness. The ATC will hopefully result in a migration of R&D expenditure to the UK, with the consequential impact on jobs and wealth creation.
“Whilst the finite detail of the regime is yet to be decided, the proposed minimum rate of 9.1%, which is broadly equal to the existing tax benefit, means the benefit will not be reduced as part of the change, with loss making companies able to receive a payable credit in cash.
“At a time when some countries are looking to reduce the benefit of their R&D incentive regimes, this demonstrates that the UK is firmly open to the R&D intensive companies!”
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