Door closes on R&D tax credits time limit
05/02/2008

Changes to generous tax breaks for research & development (R&D) activity mean businesses could lose out financially if they miss a new deadline.

The current system enables businesses to claim relief for R&D activity in the previous six years. However, fresh rules to be introduced next month mean claims can only be made for the previous two years.

"The transitional period for R&D tax relief which followed the Finance Act 2006 comes to an end on 31 March," explained Colin Smyth, tax partner at business advisers DTE.

"This means all claims for R&D tax relief must now be made in a tax return and are subject to the normal corporation tax self assessment time limits for making, amending and withdrawing claims."

Colin Smyth added: "The importance of R&D cannot be overstated: it is the whetstone on which companies sharpen their competitive edge. It is vitally important that businesses are aware of this new deadline and action any claims from previous years now, so these can be submitted on time. We still meet businesses which have not made claims - it is not as hard as it seems but they must act now."