|R&D and other product tax reliefs|
|R&D Tax Credits, small & medium sized business (SME) scheme||230.0%||230.0%|
|R&D SME Payable Credit||14.5%||14.5%|
|R&D SME Expenditure Credit||12.0%||12.0%|
|Film Tax Relief||25.0%||25.0%|
|High-end TV Tax Relief||25.0%||25.0%|
|Video Games Tax Relief||25.0%||25.0%|
|Open-ended Investment Companies and authorised Unit Trusts||20.0%||20.0%|
The meaning of Research & Development (R&D) for these purposes and for the Capital Research & Development Allowance is set out in the BEIS Guidelines issued on 5 March 2004.
Large Companies (i.e. those that are not SMEs) can make claims under the R&D Expenditure Credits (RDEC) regime. Under this regime, the benefit will be recorded as a taxable credit in operating profit and will be equal to 12% (2018-19 also 12%) of the qualifying expenditure.
Non-tax paying large companies can receive a cash payout equal to the net value of the credit, subject to a cap based on the PAYE/NIC paid over to HMRC in respect of staff costs included in the R&D claim, and being a going concern, at the time the claim is made.
Companies that are SMEs are entitled to an additional deduction of 130% of qualifying R&D expenditure. For non-tax paying SMEs a cash alternative of up to 33.35p for every pound of qualifying expenditure may be available depending on the current year tax losses.
A cap limits the total amount of SME R&D a company can claim on each project to €7.5million (euro) and a going concern requirement applies.
An SME for R&D purposes is a company which, together with certain related enterprises, meets the EU definitions but with higher limits such that it has fewer than 500 employees and either turnover not exceeding €100million (euro) or total assets not exceeding €86 million (euro).
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