United Kingdom

Details

  • Service: Tax, Corporate Tax, Budget 2014
  • Type: Press release
  • Date: 19/03/2014

Budget 2014: Chancellor boosts value of R&D tax credit  

Commenting on the increase in the rate of the Research and Development (R&D) payable tax credit for Small and Medium Sized Enterprises (SMEs) from 11% to 14.5%, announced today in the Budget, Carol Johnson, Tax Director in the Innovations Reliefs and Incentives Group at KPMG in the UK, said:

“Today’s announcement means that the amount of the payable R&D tax credit that a loss making business can claim increases by around a third from just over £24 to just over £32 for every £100 spent*. This is a very welcome boost to innovative start-up companies, many of which are loss-making as they establish themselves.

 

“The Government estimates that they will provide an additional £130m of extra funding per annum will by 2018/19.  Currently around 800 science and technology companies benefit from this credit and we anticipate this will increase as a result of today’s measure.”

 

* For the tax calculation, every £100 of cash spend has an extra £125 added to it for the purposes of the tax computation and it is this total figure that the 11% and now 14.5% is applied to. Hence a spend of £100 is enhanced to £225 and at 11% the R&D credit is worth £24.75, increasing to £32.62 at 14.5%.


Ends


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About KPMG:

 

KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff.  The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity an

 

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Margot Cowhig

Margot Cowhig

Senior PR Manager - Tax, Pensions & Economics

KPMG in the UK

020 7694 4246 / 07920 274856

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