There's a new PAYE Cap on R&D Tax Credits and if you're working on an R&D project, you need to be aware of it. The cap will impact companies who have small payroll costs if they want to use their tax credit to take a payable cash sum.
If you're unsure what R&D Tax Credits are, or if they even apply to your business, take a look here.
In summary - the cap will limit the cash that loss making companies can access using the R&D Tax Credit scheme. It's designed to attempt to limit fraudulent claims, which include significant third party costs. But some legitimate companies are likely to get caught up in the cross fire. Here are the details:
To understand if this will apply to your business, you'll need to think about the following things:
If you think the cap may affect you, there are steps you can take. By bringing more of the R&D in-house, you may be able to increase your PAYE and NIC contributions and increase your cap. If that's not possible, you may be able to apply for Intelectual Property for your advance, or manage the percentage of your costs paid to Externally Provided Workers or sub-contractors.
Understanding the PAYE Cap on R&D Tax Credits can be challenging. If you need help, get in touch. We can help you determine whether this will impact you.
While there is a vast amount of qualifying activity which can be claimed under the R&D scheme, there are some restrictions too. Find out what does not qualify.
Find out the changes announced in the spring statement including additional support for R&D intensive businesses.
Find out how how companies can meet the deadlines for R&D tax credit claims and all the key R&D tax relief changes coming into place in 2023.