How Much Is Your R&D Tax Credit Claim Worth?
We have put together a graph showing the value of an R&D tax relief or tax credit claim (a tax credit cash payment is made where a company makes a trading loss in the relevant year).
It shows the value of an R&D claim based on the following assumptions:
- You had £50,000 of eligible R&D costs in the year.
- You pay corporation tax at the standard small companies standard rate, which was 20% in the year covered by this graph.
- For Corporation Tax purposes, where you made a trading loss in the year (or the R&D enhancement value created a trading loss), you opted to trade in the loss for a tax credit cash payment.
- You did not have any brought forward losses from the previous tax year.
Note the level of R&D enhancement is 225%, which means that, for corporation tax purposes, every £1 of eligible R&D expenditure is worth £2.25 to offset against tax in your profit and loss accounts.
The graph below shows the value of an R&D claim across six different profit or loss scenarios, from £100k loss to £100k profit (see horizontal axis) assuming that the amount spent on R&D in each scenario was £50k. The claim values are shown on the vertical axis. This is the post tax cash value you would be able to claim.
Are you ready to find out if you qualify or how much your R&D claims could be worth?