The Government has introduced a series of very valuable tax reliefs for certain sectors under these headings.
Research and Development
Tax relief is available for revenue expenditure on research and development by companies (not sole traders or partnerships). The form of the relief depends on whether you are small/medium-sized or large.
The relief effectively inflates the value of R&D expenditure for tax purposes – SMEs can claim a deduction of 230% of the actual expenditure and can claim a payable tax credit from HMRC if they can’t use the deduction in the current year.
Companies can elect to pay just 10% Corporation Tax on profits attributable to qualifying patents and other qualifying intellectual property. This relatively new relief is complex and needs careful planning and preparation to make a successful claim.
Ask us if you would like help in this area or click here for further information on Patent Box.
Creative Industries Tax Relief
Creative Industry Tax Relief is available to companies within the Theatre, Film, Video Games, Orchestra, TV Animation and Museums and Galleries sectors. There are eight similar but separate Corporation Tax reliefs that allow qualifying companies to claim a larger deduction, or in some circumstances claim a payable tax credit when calculating their taxable profits.
This programme of tax reliefs is designed to promote culturally relevant productions in the UK, to bring investment into UK productions and to ensure that the UK retains a critical mass of creative skill and infrastructure.