HMRC have published draft guidance on the Research & Development Expenditure Credit (RDEC) scheme for comment by 31 January 2014, reports Harris & Co Chartered Accountants Northampton.
The Finance Act 2013 introduced an "above the line" credit for large companies for research and development (R&D) expenditure incurred on or after 1 April 2013.
For profit making companies, the credit discharges corporation tax that the company would have to pay. Companies with no corporation tax to pay will receive an immediate benefit from carrying on R&D either through a cash payment or a reduction of tax or other duties due.
The RDEC scheme will run alongside the current large company scheme until 31 March 2016 when the latter will cease. The RDEC scheme does not alter the way qualifying activity is identified or how qualifying expenditure is calculated. Only the method of giving the relief has changed.
The guidance explains the features particular to the RDEC scheme and the claims process, with examples and accompanying notes.