Introduction Details of the Section
2.The section increases the additional deduction for SMEs in calculating profits from 125% to 130%. This, combined with the normal deduction for such expenditure, gives an increased total of 230%. Losses arising from expenditure on R&D can be surrendered by a loss making company in return for a cash payment at a rate of 14.5% currently giving relief of 32.63% on the actual expenditure. After the increase in the additional deduction rate, the equivalent level of benefit will be 33.35%. The RDEC rate increases from 10% to 11%.
3.Both changes apply to expenditure incurred on or after 1 April 2015.