By Nigel Holmes, Senior Tax Specialist at Catax.
As you will be well aware, R&D tax relief (the SME version) works by creating an additional relief by uplifting certain qualifying costs in a company’s tax computation. The current uplift rate being 130% and the loss credit rate being 14.5%.
However, this method of obtaining additional relief by way of an uplift is not unique to R&D tax relief claims. In this blog, I provide a summary of the similar reliefs, the situation to which they apply, the uplift rate and, where available, some recent HMRC statistics on these reliefs.
As with R&D tax relief, these reliefs are only available to companies.
Remediation of Contaminated Land
This relief, often known by its original name of Land Remediation Relief, provides an additional 50% relief for qualifying costs incurred in seeking to remove contaminants from land and property, such as asbestos or Japanese Knotweed, or to bring long-term derelict land back into use. Qualifying costs include staff costs, materials and subcontractor costs (no 65% rule unlike R&D tax relief).
As with R&D tax relief, loss-making companies can surrender the loss in return for a 16% cash receipt.
There are no HMRC statistics for this relief as far as I am aware.
The Creative Reliefs
This is a collection of various, quite niche, tax reliefs as follows:
A claim cannot be made under different reliefs for the same expenditure nor can a claim be made for R&D tax relief for the same expenditure. Where R&D tax relief is available it will usually be the best option given the much greater uplift rate of 130%.
The above represents a very basic summary of all of these reliefs. Each has its own set of rules and whilst there are similarities with each, and also with R&D tax relief, there are many differences too.