Research & Development Capital Allowances (RDAs) offer an uncapped 100% tax deduction for capital expenditure incurred in relation to R&D activity. These represent a further corporation tax saving at 19% using the current rate.
HMRC’s criteria for claiming RDAs is the same as those used for R&D Tax Relief. So, if you’re making a claim for R&D Tax Relief and have incurred capital expenditure on plant & machinery or buildings, you could be missing out.
These Capital Allowances can be used in conjunction with Plant and Machinery Allowances and the Annual Investment Allowance. The Annual Investment Allowance also offers a 100% tax deduction, which is capped at £200,000 per annum. So allocating the different types of costs to the most appropriate relief is crucial in maximising the benefit to your company.
As ever, when it to comes to tax, things are never as simple as they seem and the best way to ensure that you have claimed your full entitlement is to speak with a professional advisor. As R&D Tax specialists, the MPA Group have a wealth of knowledge and experience in this area, and would be happy to provide you with a free assessment.Get in touch and receive a free 5 minute consultation.
Lisa Baum, Senior Tax Specialist at The MPA Group