Research & Development Capital Allowances (RDA)
You may know them by their full name - Research & Development Capital Allowances - or just by the acronym RDAs.
How does an RDA accelerate the timing of an improved post-tax position?
An RDA is the Capex equivalent of the R&D tax relief scheme that allows R&D that is capital in nature for tax purposes, 100% of the capital cost to be depreciated in the year the cost was incurred (rather than applying the appropriate depreciation policy). As a result, RDAs can make a significant positive impact in reducing your tax liabilities in this first year. Unlike AIA's, there's no limit on the amount that can be claimed.
The MMP Tax team will help to make sure you're not missing out
If any of the following apply to your company, then you should strongly consider applying for an RDA:
- You have constructed or purchased a laboratory, lab equipment, a test bed, or pilot plant
- You have purchased tangible assets, plant and equipment, specifically for R&D purposes
- You have understood that your capital expenditure is ineligible for R&D tax relief
Take a look at our IP Planning page for more information on protecting intangible assets
The MMP process for RDA claims
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Our own research stage
Our team has extensive experience in manufacturing, operations, tax, technology, science and engineering, and we've become highly efficient over years of handling RDA claims. Initial interviews with us will feel like we're getting straight to the heart of your company's activities and needs.
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Your claim development stage
We take our deep knowledge of industry best practice along with extensive domain experience and apply it to your situation. Whether areas of innovation should be considered for patent applications and, just like the acronym, we'll spell out your entitlements under the RDA in capital letters - clearly, with a full analysis of the figures.
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Ensuring we identify the full allowance you're entitled to
We keep track of HMRC's assessment criteria, and tailor every new RDA application to the latest guidance. The Government's official manual on RDA claims is split into 9 sections, which can look especially daunting. But, by taking on the bulk and fine detail of the claims process, we will save you valuable time and resources to spend on your real business activities.
Differences between RDA and R&D Tax Incentives
| RDA | R&D Tax Incentives | ||
|---|---|---|---|
|
Type of Expenditure
|
Capital Expenditure | Revenue Expenditure | |
|
Costs
|
Plant Machinery and buildings ( but not land) | Restricted to certain cost buckets: salary, consumables, EPW's, subcontracting, software | |
|
Benefit
|
100% first year capital allowance - so no tax relief of up to 19% on the cost of the asset | Tax relief or Tax credit up to 33% of the cost | |
|
R&D Definition
|
BEIS R&D definition | BEIS R&D definition |
Our team of experts, will work with your team to make the process as easy and enjoyable as possible
Work with the team who has compiled one of the largest RDA claims in the UK. Get in touch
