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R&D tax credits for SMEs


We are a UK company which undertakes R&D for our overseas parent company and receives remuneration on the basis of cost plus 5%. Are we able to claim R&D tax credits and is there anything else which we need to consider? The group qualifies as an SME under the definition in CTA 2009 s 1120.


There are two key issues to consider when determining if R&D tax credits are available under the SME scheme (CTA 2009 Part 13 Chapters 2 to 4).
Firstly condition D in s 1052(5) requires that ‘the expenditure is not incurred by the company in carrying on activities which are contracted out to the company by any person.’
Where an overseas parent company contracts...
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