Tax Incentive / Tax Relief | Practice Portfolio

Advising on R&D tax relief, Patent Box tax relief and capital allowances to help businesses operate in a tax-efficient manner.

Practice Portfolio is working in partnership with YesTax to provide R&D tax relief, capital allowances and Patent Box tax relief advice and support.

HMRC’s definition of R&D is purposefully broad. Whatever the size or sector, if a company is taking a risk by attempting to “resolve scientific or technological uncertainties” then it may be carrying out qualifying activity. This could include:

Creating new products, processes or services
Changing or modifying an existing product, process or service

This means if a business is not sure whether a project is scientifically or technologically possible, or they don’t know how to achieve it in practice, they could be resolving uncertainties and, therefore, qualify for R&D tax credits. The scheme works by giving additional tax relief on qualifying R&D expenditure and as a result of this, reducing taxable profits or increasing tax losses.

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Capital Allowances

Capital allowances are a tax relief on capital expenditure within a commercial property, incurred to enable the function of its trade. At a very basic level there is the need for a combination of qualifying expenditure and a qualifying activity.

A capital allowances claim is a specialist undertaking which requires a full survey and valuation-based exercise to be carried out on the commercial property by a capital allowances specialist with an understanding of tax matters, as well as surveying and construction. These surveyors enable a business to identify the extent of fixed plant and machinery embedded within a commercial property to unlock the true value of this tax saving opportunity.

Capital allowances are available for almost any business. However, there are some sectors which may benefit from particularly large tax saving opportunities.

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Patent Box Tax Relief

The Patent Box regime was introduced in the UK to incentivise businesses to commercialise their patented technologies. Patent Box works by reducing the tax paid on the profits derived from patented products.

Any company which does not have a patent can apply for one and benefit from the tax relief from the date the grant is applied for. It is frequently assumed that it can be a struggle to obtain a UK patent, but often a strong case can be made with a lower barrier to success.

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