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Engineering Industry Developments and Awards
News Release from: Faraday Plastics
Edited by the Engineeringtalk Editorial
Team on 23 January 2004
Tax credits available for R and D
Faraday Plastics has completed a first round of company briefings on the tax credit opportunities available through research and development activity.
Together with Plastics West Midlands, (PWM) Faraday Plastics, the UK's plastics research and development centre, has completed a first round of company briefings on the tax credit opportunities available through research and development activity Faraday Plastics director Richard Simpson says: "Judging by the feedback received at our seminars to date, this is an area where most plastics processors have not been well advised by their accountants
This article was originally published on Engineeringtalk on 28 Sep 2004 at 8.00am (UK)
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Up to 150% of a company's research and development expenditure can be set against profitability and the company's tax burden.
Any claim should be made on the company tax return (CT 600) which should be filed with the Inland Revenue within 12 months of the end of the accounting period".
Faraday Plastics and PWM held three successful seminars on the subject in the West Midlands at the end of last year.
As part of these events, spokesmen from accountancy firms and from the Inland Revenue outlined the criteria for tax relief eligibility.
A worked example given was the case of an SME company which makes an annual pre-tax profit of GBP 40,000.
The accounts include GBP 30,000 expenditure on qualifying R and D.
The tax credits provide an additional relief of 50% of the GBP 30,000 - ie GBP 15,000 - thus reducing the taxable profit to GBP 25,000.
Faraday Plastics is now set to share the method and content of these seminars with five sister Faradays in the chemical and biotech areas and will be leading a similar seminar on the subject in the spring to be held in the North West.
Details will be available from the Faraday Plastics website in due course.
Richard Simpson says: "It is vital that the company accountants and financiers in our polymer companies are aware of research and development as a credit note and as a positive issue in the reckoning and balancing of the business.
The Government's stated objective is to encourage R and D activity.
It has already committed GBP 500 million pounds a year to support the R and D tax relief.
We hope that this measure helps the cause of the R and D as well as the undoubted financial benefit.
Further details of the issue are on our website".
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