Research and Development Capital Allowances (RDA's) provide 100% uncapped first year writing down allowances on R&D facilities, plant & machinery and IT systems.
R&D Capital Allowances (RDA’s) release cash into your business by allowing you to write down all of your R&D spending on fixed assets. Unlike the Annual Investment Allowance, RDA is not capped so the more your company spends on fixed assets for R&D, the more cash will be released. And the best news is that R&D Capital Allowances can be claimed retrospectively, up to two years in arrears.
By offering 100% tax relief on most capital expenditure on R&D, Research and Development Capital Allowances can reduce your company’s corporation tax.
The reduction depends on your company’s cost of capital. Based on a cost of capital of 5% over a 25 -year period, RDA represents a net present value saving of 28%.
Your company should apply for R&D capital allowances if it has:
Your company can claim its RDA up to a year after the filing deadline of its tax return. Because this is also true for R&D Tax Relief, it is often sensible to claim both allowances at the same time.
Most R&D related capital expenditure qualifies for a tax reduction under R&D Capital Allowances, notably spending on R&D facilities such as buildings, laboratories, and so on. Exceptions include spending on intellectual property and on land.
Spending on the following is always allowable under RDA:
Spending on the following may be allowable under RDA:
By taking advantage of our specialist knowledge and experience, you can be sure of maximising your R&D Capital Allowances Claim.
This R&D tax credits calculator estimates the amount of corporation tax savings you may be entitled to by making a claim for R&D tax relief.