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.
Answer
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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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.
Answer
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...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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