R&D tax credit for SMEs

The Inland Revenue has announced that 4,500 small and medium-sized firms will be eligible for a R&D tax credit next year.

In a tax credit package proposed in March, Inland Revenue (IR) said it planned to increase the existing 100 per cent relief for current spending on R&D to 150 per cent. They will also extend the tax credits to R&D conducted outside the UK.

Now IR has increased the number of companies who qualify for the credit by lowering the minimum threshold on company spending from £50,000 to £25,000 per year. At the same time, the maximum turnover rate has been raised from £11.2m to £25m annually.