Tuesday, 7 June 2022

Tax reliefs available for innovative companies

A summary of tax reliefs available for innovative companies

Here is a summary of information provided by HMRC on tax reliefs available for innovative companies. Please contact us if you need more information.

Patent Box

The aim of the Patent Box is to provide an additional incentive for companies to retain and commercialise existing patents and to develop new innovative patented products:

       Corporation Tax: The Patent Box – GOV.UK

       Guidance CIRD200000 and pages following set out the qualifying criteria

       CIRD275000 includes a flowchart for the computation required.

Research and Development Tax credits (R&D), (including Advanced Assurance) 

Research and Development (R&D) tax relief (or credit) is a company tax relief that may reduce a company’s tax bill or in some instances involve a payment of credit by HMRC to the company. It is based on the company’s expenditure on R&D:

       Corporation Tax: Research and Development tax relief – GOV.UK

       CIRD80000 and pages following set out the qualifying criteria

       CIRD100000 includes a flowchart for the computation required and further information.

Creatives Tax Reliefs (Film, Animation, High End TV, Children’s TV, Video Games, Theatre, Orchestra, and Museums and Galleries) 

These are a group of eight reliefs that allow qualifying companies to claim a larger deduction for certain expenses. The company will receive a reduction in their Corporation Tax liability, or in some circumstances a payable tax credit.

Creative industry tax reliefs for Corporation Tax – GOV.UK

Venture Capital Schemes (EIS, SEIS, VCT)

The schemes are intended to incentivise investment in smaller, higher risk, unquoted trading companies that would otherwise struggle to access finance for growth by providing a range of income tax and capital gains tax reliefs to individual investors:

       Enterprise Investment Scheme (EIS)

       Venture Capital Trust (VCT)

       Seed Enterprise Investment Scheme (SEIS)

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