In the new merged scheme, the company making the decision to undertake R&D can claim for contracted R&D. For example, if a software company contracted to deliver a solution decides to engage in R&D for that solution, they are eligible to claim.
Similar to the existing RDEC scheme, the merged scheme will not reduce support if a company receives grants covering a portion of its R&D expenses.
The notional tax rate for loss-making entities in the merged scheme will be lowered from 25% (as in the current RDEC scheme) to 19%.
Tax Relief Delivery:
Tax relief will be administered through a taxable above-the-line expenditure credit, which will be implemented at the current RDEC rate of 20%.
Third parties cannot be nominated as payees for R&D tax credit payments, which means, in most cases, R&D reliefs will only be paid directly to the claimant company.