Research and Development tax credits
HM Treasury have published a new document entitled ‘Research and Development (R&D) tax credits: response and further consultation’. R&D tax credits were introduced for small and medium sized enterprises (SMEs) in 2000 and for large companies in 2002. The publication of this document follows a previous consultation on R&D tax credits published in November 2010 and the announcement as part of the 2011 Budget of increases in the amount of R&D tax credits available to SMEs.
The document includes a summary of responses received in response to the November 2010 consultation as well as further proposals to help remove barriers to companies claiming R&D tax credits and to provide greater certainty as to what costs qualify for credit.
The consultation section of the documents requests comments by interested parties on the following R&D tax credit related issues:
- Above the line credit.
- The benefits of the current relief for qualifying indirect activities.
- Subcontracted R&D.
- Removal of PAYE/NICs cap.
- ‘Going concern’ definition – alignment with EIS/VCT definition.
Responses to the consultation document should be sent to HM Treasury by 2 September 2011.