SMEs & LARGE COMPANIES

Could you qualify for the SME or Large Company Scheme?


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SME Scheme
Qualifying conditions

The Small to Medium Sized Enterprise Scheme is for companies employing up to 500 people with either an annual turnover not exceeding €100 (£79) million or a balance sheet not exceeding €86 (£68) million.

The company must be carrying on a trade, or a new trade arising from the successful outcome of a Research & Development Project. The company must be undertaking research and development for their own benefit and not as a subcontractor (see Large Company scheme below).

The
Benefits

An additional 125% Super-deduction for expenses incurred from 1 April 2012, which increased to 130% from 1 April 2015, you can claim an additional £125 (£130) for every £100 spent


A 14.5% repayable Tax Credit for companies with losses from 1 April 2014 for ‘surrenderable loss’


There is an upper limit of €7.5 (£5.38) million on the total amount you can receive on any individual R&D Project

Large Company Scheme
Qualifying conditions

If your company is not defined as Small or Medium then you can only claim under the Large Company Scheme. If you are an SME who has been in receipt of a grant or you have a R&D project that has been subcontracted to you, you can also claim under the Large Company Scheme.

The
Benefits

The Tax Relief for R&D costs is 30% so for every £100 you spend on qualifying costs, you can claim an additional £30.

The Research & Development Expenditure Credit (RDEC)

RDEC was introduced in 2013 to further encourage large companies to invest in R&D. RDEC has extended the reach of the Large Company scheme in that larger companies are able to submit a claim if they have made a qualifying loss.

The Credit under RDEC is accounted as income in a company’s profit and loss. The 11% rate (effective April 2015) therefore translates into a net relief of 8.8% after tax.

If you make a loss, RDEC allows you to claim the 8.8% as a cash sum, so long as you have no other outstanding taxes due to HMRC and you have paid PAYE and NI contributions for staff involved in R&D in excess of the amount of the repayment.

RDEC will replace the current Large Company Scheme in April 2016. Until that time, Large companies can chose to go either with the Large Company Scheme or use RDEC.

If you are a subcontractor you may be eligible for R&D Tax Relief under
the Large Company scheme. We can help you
establish your eligibility for Tax Relief.

An initial consultation to explore whether you may be eligible costs nothing

Cooden Tax Consulting are experts in understanding the various R&D Tax Relief schemes and can help establish which scheme is best for your company

Find Out How!