It is good tax planning across all the various taxes to make sure that you claim any relief’s that you are due, from both a personal and corporate tax point of view.

Focussing specifically on corporation tax in this blog, one such valuable but underused corporation tax relief is research and development (R&D).

It is likely that many companies do not claim this relief because either they think they are not carry on activities that qualify or they think the claim is too complicated.

One of the ways that companies can get a relatively quick tax refund from HMRC is where losses that are generated as a result of an R&D claim are surrendered for a repayable tax credit.

HMRC have recently published a consultation document which, if implemented, will make changes which will limit the amount of repayable tax credit that companies can claim with effect from April 2020.

The proposals are that a cap, of three times the company’s total PAYE/NIC liability, will be placed on the repayable tax credit that will be paid to a company for a particular year. This is not all bad news as any loss that cannot be surrendered because of this restriction can be carried forward to be used in the future, but only for up to two years.

Many companies find themselves in the position that once they start to undertake R&D they make losses for several years.

It is good sense for every company to review whether there is the potential for a R&D claim to be made.  With the proposed caps being consulted on bringing forward the timing of any R&D may also make sense.