- The key for R&D is whether the expenditure is treated as revenue, or capital for the purposes of corporation tax. Capital expenditure is not tax deductible for the purposes of corporation tax.
- If treated as revenue, then the tax benefit will be a deduction of the qualifying spend plus an additional 130% of that spend
- For example, if the Corporation tax return (e.g. profit for the year) includes capitalised R&D costs, then for the purposes of the CT return, you will only get a 130% additional deduction as the net profit has already taken the qualifying spend beenfit.