R&D tax credits extension planned
The Treasury and the Department of Trade and Industry have launched a consultation exercise over plans to extend the scope of research and development tax credits.
Proposals include changing the definitions to allow advanced ‘bought in’ computer software used in research and development to qualify and cover the term ‘consumable stores’ used up during an R&D process.
The proposals follow an earlier decision to allow software written by a company’s own staff in support of an R&D project to qualify for an R&D tax credit – even where the development of the software would not itselfqualify.
The join document says the government is willing to change the rules to include the software – but want industry’s views on how the new rule should be defined to ensure it covers ‘advanced’ software which is ‘consumed’.
The R&D relief was brought in for small and medium sized companies in 2000 and extended to large companies in 2002.