The Types of Technology Tax Relief Available Within the UK

The Types of Technology Tax Relief Available Within the UK

Background

As the government seeks to help technology businesses survive and prosper within the UK, they have issued a number of Tax Relief incentives. This is a subset of the wider set of incentives that are available to companies in the UK.

Research and Development (R&D) Tax Relief

Main article: R&D Tax Credits
R&D Tax Relief is made up of three disparate R&D regimes that support companies undertaking qualifying projects in science and technology. Depending upon a number of factors including your company's size and the nature of the costs incurred, the benefit of an R&D Tax Credit claim can be up to 26% of your qualifying expenditure (this is for small, loss-making, companies, but you can calculate the value to your business with our free online claim calculator).
At RD Relief, we specialise in supporting companies with R&D Tax Credit claims. We have the leading online software solution. Please get in touch to find out more.

Patent Box

The UK Patent Box Relief allows companies a 10% corporation tax rate for profits arising from its patented inventions. Qualifying profits are applied to the 'nexus formula' to calculate the tax liability. More information can be found from HMRC.

Capital Allowances

For projects that are capital in nature for tax purposes, can benefit from RDA (Research and Development Capital Allowances). This will enable the company to deduct the value from pre-tax profits to calculate the companies tax liability. More information can be found on the HMRC website.
The Annual Investment Allowances dictates the value of qualifying items that can be deducted from profits before tax. This currently stands at £200,000 (following a reduction from £500,000 from 1st January 2016).

Creative Industry Relief

For companies that are developing creating technology, there are various tax reliefs available that allow companies to claim a larger tax deduction or a cash credit. There are various hurdles that need to be met to claim creative industry tax relief and all media (computer games etc) must pass a formal test. More information is available on the HMRC website government's website.

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