Specialist tax consultants Bourne Business Consulting are warning businesses that they have less than two months to make research and development (R&D) tax relief claims dating back up to six years.
Changes to regulations mean that R&D claims for any period ending between March 31, 2002 and March 31 2006 must be made by 31 March, 2008. The date marks the end of a transitional period to ease in a change to the R&D relief rules, which will allow companies only two years to make a claim for relief instead of six.
R&D relief is valuable for businesses involved in science and technology. In the 12 months since they opened on 1 November 2006, HM Revenue & Customsí (HMRC) specialist R&D units ñ in Cambridge, Cardiff, Croydon, Leicester, Maidstone, Manchester and Southampton ñ dealt with almost 5,000 claims and gave companies 150 million in tax benefits.
Large companies ñ those employing more than 250 people - can claim 125 per cent of qualifying R&D expenditure when calculating profits for tax purposes, while the rate for small and medium sized enterprises (SMEs) is 150 per cent. In some cases, SMEs can surrender the relief to claim tax credits in cash from HMRC. The minimum eligible spend is 10,000 per 12 month period.
Philip Feibusch, managing partner at Bourne, said: ìTime is running out for preparation of R&D tax claims, so any business that has not yet made a claim for the 2002-2006 period should start work as soon as possible, or risk losing the tax relief forever.
ìPutting together a claim is complex ñ relevant costs must be identified and the R&D activity described ñ so it may be appropriate to seek professional help from an expert in the tax field. Although the process may be demanding, this valuable tax relief is certainly worth the effort involved in preparing a claim.î
Bourne Business Consulting LLP, based in London, was named Best Tax Team in a Boutique Firm as part of the Lexis Nexis Taxation Awards 2007. For more information, contact Bourne on 020 7960 2730 or visit:
Don't miss R&D claims deadline, say Accountants
Specialist tax consultants Bourne Business Consulting are warning businesses that they have less than two months to make research and development (R&D) tax relief claims dating back up to six years
