Small and medium-sized enterprises (SMEs) may claim additional relief for qualifying R&D expenditure. The additional relief enables an amount equal to 230% of the qualifying expenditure for an accounting period to be deducted in computing profits/losses. This is made up of the normal deduction of 100% and the additional deduction of 130%.

Example 1

Grigg Ltd incurs qualifying expenditure on R&D of £100,000 in its accounting period ended 31 December 2020. Grigg Ltd is entitled to a deduction of £230,000 in respect of this expenditure in calculating its trading income for its accounting period ended 31 December 2020.

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