Research and Development for large businesses
Many large businesses already submit R&D claims, but most have not considered if they are claiming the optimal tax relief. Deloitte has increased the tax cash savings for many large multinational organisations through a best practice methodology combined with the capability to benchmark R&D claims across industries.
With effect from 1 April 2008 large companies can claim 130% (up from 125%) of their qualifying revenue costs on eligible R&D activities when calculating their taxable profits. This means for a company paying Corporation Tax at 28% the effective benefit for each pound of qualifying revenue R&D expenditure is 8.4%. Unlike the SME scheme, there is no ability to surrender losses created by the relief or a cash credit.
The large company scheme rewards the company that performs the R&D, allowing a claim even where the performer recharges the associated costs to a group or third party company. However, companies cannot claim for payments relating to R&D that is subcontracted out to other companies. Only work subcontracted, or contributions made, to individuals, partnerships of individuals or non tax paying bodies such as charities, universities and health authorities can be claimed.
Due to the complexity of the rules, many organisations find the process of preparing a claim to be time consuming. However, our clients have benefited from tax cash savings by investing in getting the claim process right. Typically, R&D activities within a large business are carried out on multiple sites, and across different departments and cost centres. This means that identification of the key areas of eligible R&D activity and related costs can be challenging.
Deloitte brings over 5 years of experience and a best practice approach to ensure early agreement with HMRC. Our multidisciplinary R&D tax team will streamline your systems and process with minimum disruption and resource required from your team. The technical knowledge Deloitte offer means that your business can fully benefit from the available R&D tax relief.
Learn more from the Deloitte experience by downloading our PDFs:
- Capitalise on your Research and Development Allowances (RDAs) (PDF, 66.3 KB)
- Deloitte Difference (PDF, 194 KB)
The Deloitte team offer a number of bespoke services which are tailored for each organisation. Read how other large businesses have benefited:
- Need an efficient approach which can accurately identify and support eligible R&D activity from a vast number of projects? Deloitte doubled the claimable amount for this client. Read more (PDF, 222 KB)
- A technology company achieves massive tax benefits as Deloitte helps them capture the capital spend incurred on technical development projects. Read more (PDF, 218 KB)
- Complex technical developments prevented this exploration company from optimising their claim. Deloitte increased their claim by more than 500%. Read more (PDF, 222 KB)
- Are you a financial services provider who invests in the technology required to increase security of financial transactions? Want to know how to approach a R&D claim? Read more (PDF, 218 KB)
- Does your business have a complex structure with numerous divisions and commercial sectors? Want to know how to approach a R&D study on a systematic basis to ensure that all of the potentially eligible activities are identified quickly and efficiently? Read more (PDF, 218KB)
- This engineering consultancy has a dynamic project-based structure which made it difficult to accurately capture, calculate and optimise their R&D claim. The Deloitte approach provided the answer. Read more (PDF, 218 KB)
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