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Losses for credits
Key points
- The decision to surrender losses may not be cut and dried.
- Companies that made a taxable profit in previous periods can carry back the R&D loss.
- Wider groups of companies can share the losses.
While most UK businesses have become more aware of research and development (R&D) tax relief – and will be getting value from the schemes – the question now could be how and why to surrender the loss for a R&D tax credit.
When claiming R&D tax relief companies can use their qualifying R&D expenditure as a tax credit releasing a cash payment. To surrender losses in this way firms must be in a tax loss position according to the tax computation – the financial statements position can tell a different story.
Both the small and medium-sized enterprises and R&D expenditure credit (RDEC) schemes include tax credit options with the amount of...
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