Knowledge bank
Adjacent reliefs
Patent Box, capital allowances and grant interaction.
4 answers
- Can we claim R&D tax relief as well as a creative industry relief? Often yes, but never on the same expenditure. Where a cost qualifies for R&D relief it is generally locked out of the creative relief, whether or not you make an R&D claim.
- How do capital allowances interact with an R&D tax relief claim? R&D relief covers revenue spending and capital allowances cover capital spending, so they do not overlap. One item of capital expenditure gets one allowance, and which one you take matters.
- What are research and development allowances (RDAs)? RDAs give a 100% deduction for capital spending on R&D, including buildings — which R&D tax relief cannot reach. Land is excluded, and selling the asset triggers a charge.
- What is the Patent Box and could my company benefit? The Patent Box taxes profits from patented inventions at an effective 10%. You have to elect into it, and how much you get depends on how much of the underlying R&D you did yourself.
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