Research and Development Allowances (RDAs) are potentially available to any business or individual that incurs qualifying expenditure on R&D. The allowances are only available to traders and are usually given in full from the outset.
Expenditure on R&D includes all costs incurred for the undertaking of research and development tasks and costs related to the provision of facilities for carrying out research and development.
RDAs are only given for the chargeable period in which the expenditure is incurred. Therefore, any individual or company who fails to make a claim at the appropriate time will not be able to do so in the future, once that particular tax year has closed.
A balancing charge is imposed if the individual or company is required to bring in a disposal value (eg due to cession of the asset) for a period later than that in which the qualifying expenditure was incurred.
Know-how allowances are available to income tax payers where an individual incurs capital expenditure on the acquisition of ‘know-how’. These allowances relate mainly to industrial information and techniques.
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