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Is R&D Tax Relief Taxable?

Is R&D Tax Relief Taxable In 2024

Understanding the tax implications of Research and Development (R&D) tax relief is crucial for businesses. This guide provides an overview of whether R&D tax relief is taxable in 2024.

R&D Tax Relief: An Overview

R&D tax relief supports UK companies working on innovative projects in science and technology. It allows companies to deduct an extra 86% of their qualifying costs, in addition to the normal 100% deduction from their yearly profit.

Is R&D Tax Relief Taxable?

The simple answer is no. R&D tax relief is not considered taxable income. Instead, it reduces the amount of Corporation Tax your company has to pay. If your company is making a loss, you can choose to claim a payable credit1.

Changes to R&D Tax Relief in 2024

For accounting periods beginning on or after 1 April 2023, companies may need to notify HMRC if they plan to claim R&D tax relief or expenditure credit. From 8 August 2023, companies must complete and submit an additional information form to HMRC to support all their claims for R&D tax relief or expenditure credit.

How to Claim R&D Tax Relief

To claim R&D tax relief, your company’s project must meet the standard definition of R&D. The project must relate to your company’s trade, either an existing one, or one that you intend to start up based on the results of the R&D.

In conclusion, R&D tax relief is not taxable. It’s a beneficial incentive for companies investing in innovative projects. Understanding the tax implications of R&D tax relief can help companies make informed decisions about their R&D investments.

Please note that this information is current as of January 2024 and may be subject to change. Always consult with a tax professional for the most accurate information.


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